UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 18, 2002
The Finx Group, Inc.
(formerly known as Fingermatrix, Inc.)
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(Exact name of registrant as specified in its charter)
Delaware 0-9940 13-2854686
(State or other jurisdiction of (Commission file (IRS Employer
incorporation or organization) number) Identification Number)
249 Saw Mill River Road, Elmsford, NY 10523
(Address of Principal Executive Offices) (Zip Code)
(914) 592-5930
(Registrant's telephone number, including area code)
1
Item 2. Acquisition or Disposition of Assets
On October 18, 2002, the Registrant consummated a plan to dispose of
certain of its subsidiaries. In September 2002, the Board of Directors of The
Finx Group, Inc. (the "Registrant" or the "Company") approved a plan whereby it
was determined to be in the best interests of the Registrant to focus all of its
resources on the Security Systems business segment, whereby all business
segments other than the Security Systems business segment would be disposed. The
decision to dispose of all businesses unrelated to the Security Systems segment
was based on management's evaluation of its capability to support multiple and
diverse business segments. Management's evaluation was confirmed in a business
assessment report received from vFinance Investments, Inc. ("vFinance"), who is
performing management and investment banking services to the Registrant. The
business assessment report received from vFinance, among other things,
recommended that the Registrant streamline its operating activities to focus on
its Security Systems business segment. The Registrant's management investigated
various possible venues to undertake the disposal of the non Security System
segments which include Sequential Electronic Systems, Inc. ("Sequential"),
S-Tech, Inc. ("S-Tech"), Granite Technologies, Inc. ("Granite Technologies"),
Shopclue.com, Inc. ("Shopclue"), Bizchase, Inc. ("Bizchase") and Starnet365.com,
Inc. ("Starnet").
The Registrant engaged a consultant, pursuant to a consulting
agreement, to assist in developing an exit strategy for the disposal of Granite
Technologies, Shopclue, Bizchase and Starnet for which the consultant received
an option to purchase 1,000,000 shares of its Common Stock at an exercise price
of $.04 per share, the fair market value on the date of grant. Through the
efforts of the consultant, the Registrant found a purchaser who agreed to
acquire Granite Technologies, Shopclue, Bizchase and Starnet for nominal
consideration subject to the forgiveness of the amounts owed by such
subsidiaries to the Registrant and the retention by the Registrant of certain
rights to the assets of Granite Technologies. As a result, the Registrant
entered into the following purchase agreements with Thomas Banks Ltd. ("Thomas
Banks").
Granite Technologies
Granite Technologies Acquisition Corp. ("Granite Acquisition") is
wholly owned by The Registrant and Granite Technologies is wholly owned by
Granite Acquisition. Pursuant to the terms of a stock purchase agreement among
Granite Acquisition, Granite Technologies and Thomas Banks dated as of September
30, 2002, (the "Granite Stock Purchase Agreement"), Thomas Banks agreed to
purchase all of the issued and outstanding capital stock of Granite Technologies
from Granite Acquisition for one dollar ($1) and the Registrant agreed to cancel
approximately $600,000 of principal and interest owed by Granite Technologies to
the Registrant. In addition, pursuant to the Granite Stock Purchase Agreement,
Granite Acquisition retained the rights to all Intellectual Property of Granite
Technologies, Inc. including (i) patents, pending patent applications and patent
applications in process but not yet filed, owned by or assignable to Granite
Technologies (the "Patents"); registered trademarks and service marks and
pending applications therefor and trade names owned Granite Technologies; and
copyright registrations and pending applications therefor owned by Granite
Technologies and used by Granite Technologies in the conduct of its business
(the "Marks"; (ii) written licenses and other agreements relating to the
Patents, Marks and Copyrights, and (iii) manufacturing, process, and other
technology transfer and license agreements which are material to the conduct of
such business and retained all rights and benefits inured from any and all
contracts between Granite Technologies and Virginia Commonwealth University. As
of the date of the Granite Stock Purchase Agreement, Granite Technologies had an
excess of liabilities over assets of approximately $1.4 million, including the
$600,000 owed to the Registrant. As a result of the disposal of Granite
Technologies, the net reduction in the liabilities of the Registrant will
approximate $800,000.
2
Starnet
Pursuant to the terms of a stock purchase agreement among the
Registrant, Starnet, Lewis S. Schiller, the Registrant's Chief Executive Officer
and Chairman of the Board, Grazyna B. Wnuk, the Registrant's Vice-President and
Secretary, members of Lewis S. Schiller's immediate family (collectively, the
"Starnet Sellers") and Thomas Banks dated as of September 30, 2002, (the
"Starnet Stock Purchase Agreement"), Thomas Banks agreed to purchase 98.05% of
the issued and outstanding capital stock of Starnet from the Starnet Sellers for
one dollar ($1) and the Registrant agreed to cancel approximately $1.3 million
of principal and interest owed by Starnet to the Registrant. As of the date of
the Starnet Stock Purchase Agreement, Starnet had an excess of liabilities over
assets of approximately $1.7 million, including the $1.3 million owed to the
Registrant, resulting in remaining liabilities of approximately $400,000. The
Registrant believes that it may be required to pay approximately $132,000 of
such remaining liabilities based on the existence of corporate guarantees
previously made on such amounts by the Registrant. As a result of the disposal
of Starnet, the net reduction in the liabilities of the Registrant will
approximate $268,000.
Shopclue
Pursuant to the terms of a stock purchase agreement among the
Registrant, Shopclue, Lewis S. Schiller, the Registrant's Chief Executive
Officer and Chairman of the Board, Grazyna B. Wnuk, the Registrant's
Vice-President and Secretary, members of Lewis S. Schiller's immediate family
(collectively, the "Shopclue Sellers") and Thomas Banks dated as of September
30, 2002, (the "Shopclue Stock Purchase Agreement"), Thomas Banks agreed to
purchase 100% of the issued and outstanding capital stock of Shopclue from the
Shopclue Sellers for one dollar ($1) and the Registrant agreed to cancel
approximately $8,000 of principal and interest owed by Shopclue to the
Registrant. As of the date of the Shopclue Stock Purchase Agreement, Shopclue
had an excess of liabilities over assets of approximately $340,000, including
the $8,000 owed to the Registrant, resulting in remaining liabilities of
approximately $332,000. The Registrant believes that it may be required pay
approximately $169,000 of such remaining liabilities which represent delinquent
payroll taxes. As a result of the disposal of Shopclue, the net reduction in the
liabilities of the Registrant will approximate $163,000.
Bizchase
Pursuant to the terms of a stock purchase agreement among the
Registrant, Bizchase, Lewis S. Schiller, the Registrant's Chief Executive
Officer and Chairman of the Board, Grazyna B. Wnuk, the Registrant's
Vice-President and Secretary, members of Lewis S. Schiller's immediate family
(collectively, the "Bizchase Sellers") and Thomas Banks dated as of September
30, 2002, (the "Bizchase Stock Purchase Agreement"), Thomas Banks agreed to
purchase 100% of the issued and outstanding capital stock of Bizchase from the
Bizchase Sellers for one dollar ($1) and the Registrant agreed to cancel
approximately $2 million of principal and interest owed by Bizchase to the
Registrant. As of the date of the Bizchase Stock Purchase Agreement, Bizchase
had an excess of liabilities over assets of approximately $2.3 million,
including the $2 million owed to the Registrant, resulting in remaining
liabilities of approximately $295,000. The Registrant believes that it may be
required pay approximately $136,000 of such remaining liabilities of which
$99,000 relates to delinquent payroll taxes and $37,000 relates to corporate
guarantees. As a result of the disposal of Bizchase, the net reduction in the
liabilities of the Registrant will approximate $295,000.
3
Sequential and S-Tech
Pursuant to the terms of a stock purchase agreement among the
Registrant, Sequential, S-Tech, Defense Manufacturing and Systems, Inc.
("Defense Manufacturing") and Trinity Group Acquisition Corp. ("Trinity
Acquisition") dated as of September 30, 2002 (the "Sequential and S-Tech Stock
Purchase Agreement"), Trinity Acquisition agreed to purchase 100% of the issued
and outstanding capital of Sequential, S-Tech and Defense Manufacturing from the
Registrant for one dollar ($1) and the Registrant agreed to cancel approximately
$2.3 million of principal and interest owed by Sequential and S-Tech to the
Registrant. Defense Manufacturing is wholly owned by the Registrant but has had
no operating activities since its organization. Trinity Acquisition is wholly
owned by Lewis S. Schiller, the Registrant's Chief Executive Officer and
Chairman of the Board. As of the date of the Sequential and S-Tech Stock
Purchase Agreement, Sequential and S-Tech had aggregate assets $1.2 million and
aggregate liabilities of $2.4 million, excluding the $3.1 million owed to the
Registrant. The aggregate liabilities include $1.1 million of delinquent payroll
taxes and the Registrant has agreed to indemnify Lewis S. Schiller for any
claims made against him regarding such delinquent payroll taxes. The Trinity
Group-I, Inc. is the Company's controlling shareholder and both The Trinity
Group-I, Inc. and Trinity Acquisition are wholly owned by Lewis S. Schiller, and
the Sequential and S-Tech Stock Purchase Agreement was not consummated at
arms-length. However, the Registrant believes that because the transaction will
reduce the Registrant's liabilities by approximately $2.4 million that such
transaction is in its best interests.
Item 7. Financial Statements and Exhibits
a. Pro Forma Financial Information
i. Pro Forma Financial statements giving effect to the
acquisition for the most recent fiscal and interim period.(1)
c. Exhibits
99.1 Stock Purchase Agreement dated September 30, 2002, by and among
Granite Technologies Acquisition Corp., Granite Technologies,
Inc. and Thomas Banks Ltd.
99.2 Stock Purchase Agreement dated September 30, 2002, by and among
The Finx Group, Inc., each of the Shareholders of Bizchase, Inc.,
Bizchase, Inc., and Thomas Banks Ltd.
99.3 Stock Purchase Agreement dated September 30, 2002, by and among
The Finx Group, Inc., each of the Shareholders of Starnet365.Com,
Inc., Starnet365.Com, Inc., and Thomas Banks Ltd.
99.4 Stock Purchase Agreement by and among The Finx Group, Inc., each
of the Shareholders of Shopclue.Com, Inc., Shopclue.Com, Inc.,
and Thomas Banks Ltd.
99.5 Stock Purchase Agreement by and among The Finx Group, Inc.
Sequential Electronic Systems, Inc., S-Tech, Inc., Defense
Manufacturing and Systems, Inc. and Trinity Group Acquisition
Corp.
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(1) To be filed by amendment within sixty days from the initial due
date of this Form 8-K.
4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE FINX GROUP, INC.
By:/S/ Lewis S. Schiller
Chief Executive Officer
Date: October 21, 2002
5
Exhibit 99.1
STOCK PURCHASE AGREEMENT
BY AND AMONG
GRANITE TECHNOLOGIES ACQUISITION CORP.,
GRANITE TECHNOLOGIES, INC.
AND
THOMAS BANKS LTD.
Dated: As of September 30, 2002
Exhibit 99.1
Page 1
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of September 30, 2002 (the
"Agreement"), among Granite Technologies Acquisition Corp., a corporation
organized under the laws of the State of Delaware (the "Seller") with an office
at 249 Saw Mill River Road, Elmsford, New York 10523, Granite Technologies Inc.,
a corporation organized under the laws of the State of Delaware with an office
at 249 Saw Mill River Road, Elmsford, New York 10523 (the "Company") and Thomas
Banks Ltd., a Cayman corporation with an office at #4-2443 Barrio Don Bosco, San
Jose, Costa Rica (the "Purchaser").
WITNESSETH:
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The Seller holds 100% the Company's shares (the "Shares") of common
stock, par value $.01 per share (the "Common Stock"), of the Company, a
corporation organized under the laws of the State of Delaware.
The Purchaser desires to acquire from the Sellers, and the Sellers
collectively desire to sell to the Purchaser, for the consideration hereinafter
provided, the Shares; and
Certain terms used in this Agreement are defined in Section 9.2 of
this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual covenants
and agreements hereinafter contained, the parties hereto, intending to be
legally bound, hereby agree as follows:
Exhibit 99.1
Page 2
1. Sale and Purchase of Shares; the Closing.
1.1. Sale and Purchase of Shares. Subject to the terms and conditions
of this Agreement and on the basis of the representations,
warranties, covenants and agreements herein contained, on the
Closing Date, the Seller shall sell, assign and convey to the
Purchaser, and the Purchaser shall purchase, acquire and accept
from the Seller, all of the Shares of such Seller. At the Closing,
the Seller shall deliver one or more stock certificates
representing the Shares of the Seller duly endorsed for transfer to
the Purchaser.
1.2. The Closing. The consummation of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of
the parties to the transaction upon execution of this Agreement on
September 30, 2002 or at such other time and date as the parties
hereto mutually agree (the "Closing Date").
2. Consideration.
2.1. Consideration. The consideration for the Shares shall be as
follows:
2.1.1. One Dollar ($1).
2.1.2. The retention by the Seller of all Intellectual Property of
Granite Technologies, Inc. including (i) patents, pending
patent applications and patent applications in process but not
yet filed, owned by or assignable to the Company or any of its
subsidiaries (the "Patents"); registered trademarks and
service marks and pending applications therefor and trade
names owned by the Company or any of its subsidiaries (the
"Marks"); and copyright registrations and pending applications
therefor owned by the Company and used by the Company in the
conduct of its business (the "Copyrights"); (ii) written
licenses and other agreements relating to the Patents, Marks
and Copyrights, and (iii) manufacturing, process, and other
technology transfer and license agreements which are material
to the conduct of such business.
2.1.3. The retention by the Seller to all rights and benefits
inured from any and all contracts between Granite
Technologies, Inc. and Virginia Commonwealth University.
2.1.4. The cancellation of indebtedness owed by the Company or its
subsidiary to the Seller and the Seller's affiliates and or
subsidiaries.
3. Representations and Warranties of the Sellers. The Seller hereby
represent and warrant to the Purchaser, that to the best of their
knowledge:
3.1. Organization and Good Standing.
Exhibit 99.1
Page 3
3.1.1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to own,
lease and operate its properties and to carry on its business
as it is now conducted and as it is proposed to be conducted.
3.1.2. The minute books of The Company contain accurate records of
all meetings and all other material corporate action of the
Company's board of directors (including any committees
thereof) and its stockholders since the date of the Company's
incorporation.
3.2. Authorization of Agreement. The Seller has all requisite capacity,
power and authority to execute and deliver this Agreement and each
other agreement, document, instrument or certificate contemplated
by this Agreement or to be executed by such Seller in connection
with the consummation of the transactions contemplated by this
Agreement (this Agreement and the other agreements, documents,
instruments or certificates delivered pursuant to this Agreement
are hereinafter referred to as the "Transaction Documents"), and to
perform fully its obligations hereunder and thereunder. This
Agreement has been, and each of the other Transaction Documents
will be (when executed and delivered by the Seller), duly and
validly authorized, executed and delivered by the Seller and this
Agreement constitutes, and each of the other Transaction Documents
will constitute (when executed and delivered by the Seller), legal,
valid and binding obligations of the Seller, enforceable against
the Seller in accordance with their respective terms, subject, as
to enforceability, to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law
or in equity).
3.3. Subsidiaries. The Company has no subsidiaries and does not own any
other capital stock or other proprietary interest, directly or
indirectly, in any corporation, association, trust, partnership,
joint venture or other entity or have any agreement to acquire any
such capital stock or other proprietary interest except for the
following:
3.3.1. The Company owns all of the equity of Granite Technologies,
Inc. and such ownership is deemed transferred to Purchaser by
Seller upon execution of this Agreement.
3.4. No Conflicts; Consents of Third Parties. The execution and
delivery by the Seller of this Agreement and the other Transaction
Documents, the consummation of the transactions contemplated hereby
or thereby, and the compliance by the Seller with any of the
provisions hereof or thereof does not and will not (i) conflict
with, or result in the breach of, any provision of the certificate
of incorporation or by-laws of The Company; (ii) conflict with,
violate, result in the breach or termination of, or constitute a
default or give rise to any "takeback" right or right of
termination or acceleration or right to increase the obligations or
otherwise modify the terms thereof under any Contract,
Exhibit 99.1
Page 4
Permit or Order to which the The Company is a party or by which The
Company or the properties or assets of the Seller are bound; (iii)
constitute a violation of any Law applicable to The Company; or (iv)
result in the creation of any Lien upon the properties or assets of
The Company or the Seller.
3.5. Capitalization.
3.5.1. The authorized capital stock of The Company consists of
1,000 shares of Common Stock and 1,500 shares of preferred
stock. As of the date hereof, 1,000 shares of Common Stock are
issued and outstanding, all of which are owned of record and
beneficially by the Seller and constitute the Shares. As of
the date hereof, there are no shares of Company preferred
stock issued and outstanding. There is no existing option,
warrant, call, right, commitment or other agreement of any
character to which The Company is a party requiring, and there
are no securities of The Company outstanding which upon
conversion or exchange would require, the issuance, sale or
transfer of any additional shares of capital stock or other
equity securities of The Company or other securities
convertible into, exchangeable for or evidencing the right to
subscribe for or purchase shares of capital stock or other
equity securities of The Company. Neither The Company nor the
Seller is a party to any voting trust or other voting
agreement with respect to any shares of capital stock or to
any agreement relating to the issuance, sale, redemption,
transfer or other disposition of capital stock of The Company
3.5.2. The Shares purchased by the Purchaser will, at the Closing,
constitute 100% all of the issued and outstanding capital
stock of The Company on a fully diluted basis.
3.6. Financial Statements. Set forth on Schedule 3.6 of the Disclosure
Schedules are (i) copies of the Company's unaudited balance sheets
as of June 30, 2002 and December 31, 2001 and the related unaudited
statements of income and of cash flows for the three and six month
periods ended June 30, 2002 and 2001, (the "Unaudited Financial
Statements"). The Unaudited Financial Statements have been prepared
on a going concern basis, which contemplates the realization of
assets and the liquidation of liabilities in the normal course of
business. However, the Company has a history of net losses and has
a working capital deficiency. The Unaudited Financial Statements do
not include any adjustments that would result should the Company be
unable to continue as a going concern.
3.7. There have not been any amendments or changes in the certificate
of incorporation or the by-laws of the Company.
3.8. The Company has caused to be done all things materially necessary
to maintain, preserve and renew its corporate existence and all
material licenses, authorizations and permits necessary to the
conduct of its business.
Exhibit 99.1
Page 5
4. Representations and Warranties of the Purchaser. The Purchaser hereby,
jointly and severally, represent and warrant to the Sellers that:
4.1. Organization and Good Standing. The Purchaser is a corporation
duly organized, validly existing and in good standing. The
Purchaser has full corporate power and authority to own, lease and
operate their properties and to carry on their business as it is
now conducted and as it is proposed to be conducted.
4.2. Authorization of Agreement. The Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement
and each of the other Transaction Documents to be executed by the
Purchaser in connection with the consummation of the transactions
contemplated hereby and thereby, and to perform fully their
obligations hereunder and thereunder. The execution, delivery and
performance by the Purchaser of this Agreement and each of the
other Transaction Documents to be executed by the Purchaser has
been duly authorized by all necessary action on behalf of the
Purchaser. This Agreement has been, and each of the other
Transaction Documents will be (when executed and delivered by the
Purchaser), duly and validly executed and delivered by the
Purchaser and (assuming the due authorization, execution and
delivery by the other parties hereto and thereto) this Agreement
constitutes, and each of the other Transaction Documents will
constitute (when executed and delivered by the Purchaser), legal,
valid and binding obligations of the Purchaser, enforceable against
the Purchaser in accordance with their respective terms, subject,
as to enforceability, to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject to general principles of
equity (regardless of whether enforcement is sought in a proceeding
at law or in equity).
4.3. No Conflicts; Consents of Third Parties. The execution and
delivery by the Purchaser of this Agreement and the other
Transaction Documents to be executed by the Purchaser, the
consummation of the transactions contemplated hereby or thereby,
and the compliance by the Purchaser with any of the provisions
hereof or thereof does not and will not (a) conflict with, or
result in the breach of, the certificate of incorporation or
by-laws of the Purchaser, (b) conflict with, violate, result in the
breach of, or constitute a default under any Contract or Order to
which the Purchaser is a party or by which the Purchaser or their
properties or assets are bound or (c) constitute a violation by the
Purchaser of any Law applicable to the Purchaser. No consent,
waiver, approval, Order, Permit or authorization of, or declaration
or filing with, or notification to, any Person or Governmental Body
is required on the part of the Purchaser in connection with the
execution and delivery of this Agreement or the other Transaction
Documents to be executed by the Purchaser or the compliance by the
Purchaser with any of the provisions hereof or thereof which has
not been made or obtained.
4.4. Litigation. There are no Legal Proceedings against the Purchaser
pending or, to the best knowledge of the Purchaser, threatened that
question the validity of this Agreement or any of the other
Transaction Documents or any action taken or to be taken by the
Purchaser in connection with the consummation of the transactions
contemplated hereby
Exhibit 99.1
Page 6
or thereby. There is no action, suit, investigation or proceeding
(or, to the knowledge of the Purchaser, any basis therefor) pending
against, or to the knowledge of the Purchaser threatened, against
or affecting the Purchaser, any of their Subsidiaries or any of
their properties before any court or arbitrator or any governmental
body, agency or official that if adversely determined against the
Purchaser, would result in a Material Adverse Change to the
Purchaser.
4.5. No Misrepresentation. No representation or warranty of the
Purchaser contained in this Agreement (including the Disclosure
Schedules hereto) or in any other Transaction Document furnished to
the Seller pursuant to the terms hereof contains or will contain
any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained
herein or therein, in light of the circumstances under which they
were made, not misleading. The Purchaser does not know of any facts
which have caused or in the future are reasonably likely to cause a
Material Adverse Change which has not been disclosed herein or in a
Disclosure Schedule hereto. The representations and warranties
contained in this Section 4.11 or elsewhere in this Agreement or in
any other Transaction Document shall not be affected or deemed
waived by reason of the fact that any Seller and/or any
Representative of any Seller knows or should have known that any
such representation or warranty is or might be inaccurate in any
respect.
5. Additional Representations, Warranties and Covenants.
5.1. Title and Investment Representations. The Seller represents and
warrants to, and covenants and agrees with the Purchaser that, it
has good and marketable title to the Shares of the Seller, free and
clear of all Liens of any kind or nature whatsoever and that at the
Closing, the Purchaser will obtain good and marketable title to
such Shares, free and clear as aforesaid.
5.2. Information Representations. The Seller represents and warrants
that (i) such Seller, and his Representatives as deemed necessary
by such Seller (including such Seller's professional, tax and other
advisors), have carefully reviewed the materials (the "Materials")
furnished by the Purchaser to such Seller in connection with the
transactions contemplated by this Agreement and (ii) such Seller,
and such Seller's Representatives, have been granted the
opportunity to ask questions of, and receive answers from,
Representatives of the Purchaser concerning the Purchaser and to
obtain any additional information that such Seller deemed necessary
to verify the accuracy of the information contained herein.
5.3. Advise of Changes. During the period from the date of this
Agreement until the earlier of the Closing Date, The Company will
promptly advise the Purchaser in writing of the following, to the
extent it has knowledge of the same: (a) of any event occurring
subsequent to the date of this Agreement that would render any
representation or warranty of the Seller contained in this
Agreement, if made on or as of the date of such event or the
Closing Date, materially inaccurate, (b) of any Material Adverse
Change,
Exhibit 99.1
Page 7
and (c) of any breach by the Seller of any covenant or agreement
contained in any Transaction Document.
5.4. Maintenance of Business. From the date hereof until the earlier of
the Closing Date and the termination of this Agreement in
accordance with its terms, the Seller shall cause The Company to:
5.4.1. cause to be done all things necessary to maintain, preserve
and renew its (i) corporate existence and all material
licenses, authorizations and permits necessary to the conduct
of its businesses and (ii) relationships with customers,
suppliers, employees and others in substantially the same
manner as it has prior to the date hereof;
5.4.2. comply in all material respects with all applicable Laws;
and
5.4.3. maintain proper books of record and account which present
fairly in all material respects its financial condition and
results of operations and make provisions on its financial
statements for all such proper reserves as in each case are
required in accordance with generally accepted accounting
principles, consistently applied.
5.5. Conduct of Business. During the period from the date of this
Agreement until the Closing Date, The Company will continue to
conduct its business and maintain its business relationships in the
ordinary and usual course and will not (except to the extent, but
only to the extent, deemed necessary by the officers and directors
of The Company in fulfilling their fiduciary duties), without the
prior written consent of the Purchaser,:
5.5.1. (i) declare, set aside or authorize the payment of, any
dividend or other distribution in respect of any shares of
capital stock of The Company or repurchase, redeem or acquire
any of the outstanding shares of any class of capital stock or
(ii) pay or otherwise distribute any other amounts or assets
to the Seller, whether as compensation or otherwise;
5.5.2. split or combine the outstanding shares of its capital
stock of any class or enter into any recapitalization or
agreement affecting the number or rights of outstanding shares
of any class of its capital stock;
5.5.3. (i) award or pay any bonuses to employees of The Company,
(ii) enter into or modify or amend any employment, deferred
compensation, severance or similar agreement, (iii) increase
or agree to increase the compensation payable or to become
payable by it to any of The Company's directors, officers,
employees, agents or Representatives or (iv) increase or agree
to increase the coverage or benefits available under any
severance pay, termination pay, vacation pay, company awards,
salary continuation for disability, sick leave, deferred
compensation, bonus or other incentive compensation,
insurance, pension or other employee benefit plan, payment
Exhibit 99.1
Page 8
or arrangement made to, for or with such directors, officers,
employees, agents or Representatives;
5.5.4. change accounting principles, methods or policies;
5.5.5. enter into any Contract requiring payments in excess of
$5,000, or conduct its business other than in the ordinary
course of business consistent with past practice;
5.5.6. (i) incur or repay any Indebtedness, (ii) make any loans,
advances or capital contributions to any other Person or (iii)
assume, guarantee, endorse or otherwise become liable for the
obligations of any other Person.
5.5.7. fail to maintain and keep its properties in good repair,
working order and condition, normal wear and tear excepted;
5.5.8. fail to comply with all other obligations which it incurred
pursuant to any Contract or promptly pay or discharge any
current liabilities, as such obligations become due, unless
and to the extent that the same are being contested in good
faith and by appropriate proceedings and adequate reserves (as
determined in accordance with generally accepted accounting
principles, consistently applied) have been established on its
books with respect thereto;
5.5.9. mortgage, pledge or subject to any Lien any of its assets,
or acquire any assets or sell, assign, transfer, convey, lease
or otherwise dispose of any assets of The Company (other than
the sale of inventory in the ordinary course of business
consistent with past practice);
5.5.10. discharge or satisfy any Lien, or pay any obligation or
liability (fixed or contingent), except in the ordinary course
of business consistent with past practice and which, in the
aggregate, would not be material to The Company;
5.5.11. transfer or grant any rights under any concessions, leases,
licenses, agreements or Intellectual Property used by The
Company in its business;
5.5.12. make or commit to make any capital expenditures or capital
additions or betterments;
5.5.13. institute or settle any Legal Proceeding;
5.5.14. amend its certificate of incorporation or by-laws;
5.5.15. issue, sell or transfer any shares of its capital stock of
any class or any other of its securities, or issue or create
any options, warrants, calls, rights, commitments,
subscriptions, convertible securities or other agreements of
any character requiring
Exhibit 99.1
Page 9
The Company to issue, sell or transfer any shares of capital
stock, or accelerate the vesting of any outstanding security;
5.5.16. merge, consolidate or reorganize with, or acquire, any
entity;
5.5.17. agree to any audit assessment by any Tax authority or fail
to pay and discharge when payable all Taxes, assessments and
governmental charges imposed upon its properties or upon the
income or profits therefrom (in each case before the same
becomes delinquent and before penalties accrue thereon) and
all claims for labor, materials or supplies which if unpaid
would by law become a Lien upon any of its property;
5.5.18. change any insurance coverage, issue any certificates of
insurance or fail to continue in force with nationally
recognized insurance companies adequate insurance covering
risks of such types and in such amounts as are customary for
Persons engaged in similar lines of business;
5.5.19. enter into any transaction with, or become party to any
Contract with, any officer, director, or Affiliate (or any
relative of any of them) of The Company; or
5.5.20. agree to do, or enter into negotiations with respect to,
any of the things described in the preceding clauses in this
Section 5.5.
5.6. Regulatory Approvals. The Seller will, and will cause The Company
to, promptly execute and file, or join in the execution and filing,
of any application or other document that may be necessary in order
to obtain the authorization, approval or consent of any Governmental
Body which may be reasonably required, or which the Purchaser may
reasonably request in connection with the consummation of the
transactions contemplated by this Agreement. The Seller will use its,
and will cause The Company to use its, best efforts to promptly
obtain all such authorizations, approvals and consents.
5.7. Necessary Consents. During the period from the date of this
Agreement until the Closing Date, the Seller will use its, and will
cause The Company to use its, best efforts to obtain such written
consents and take such other actions as may be necessary or
appropriate to facilitate the consummation of the transactions
contemplated hereby and by the other Transaction Documents and to
allow the Purchaser to carry on the Company's business after the
Closing Date.
5.8. Access to Information. During the period from the date of this
Agreement until the earlier of the Closing Date or the termination of
this Agreement in accordance with its terms, the Sellers will, and
shall cause The Company to, (i) allow the Purchaser and its
Representatives reasonable access to the files, books, records,
personnel and offices of The Company, including, without limitation,
any and all information relating to the Company's Taxes, commitments,
Contracts, and real, personal and intangible property and financial
condition, (ii) furnish promptly to the Purchaser all information
concerning
Exhibit 99.1
Page 10
the Company's business, properties and personnel as the Purchaser
may reasonably request, and (iii) make available to the Purchaser
the appropriate individuals (including attorneys, accountants and
other professionals) for discussion of the Company's business,
properties and personnel as the Purchaser may reasonably request.
The Seller will cause the Company's accountants to cooperate with
the Purchaser and its Representatives in making available to the
Purchaser all financial information reasonably requested,
including, without limitation, the right to examine all working
papers pertaining to all Tax returns and financial statements
prepared, reviewed or audited by such accountants.
5.9. Satisfaction of Conditions Precedent. During the period from the
date of this Agreement until the Closing Date, the Seller will use
its, and will cause the Company to use its, best efforts to satisfy
or cause to be satisfied all the conditions precedent that are set
forth in Section 7.
5.10. Directors and Officers of the Company. As of the Closing Date, all
officer and directors of the Company shall resign and shall be
replaced by the Purchaser's nominees.
6. Covenants of the Purchaser.
6.1. Advise of Changes. During the period from the date of this
Agreement until the Closing Date, the Purchaser will promptly advise
the Seller in writing (a) of any event occurring subsequent to the
date of this Agreement that would render any representation or
warranty of the Purchaser, as the case may be, contained in this
Agreement, if made on or as of the date of such event or the Closing
Date, materially inaccurate in any material respect, and (b) of any
breach by the Purchaser of any covenant or agreement contained in
this Agreement.
6.2. Regulatory Approvals. The Purchaser will promptly execute and
file, or join in the execution and filing, of any application or
other document that may be necessary in order to obtain the
authorization, approval or consent of any Governmental Body, or which
the Seller may reasonably request in connection with the consummation
of the transactions contemplated by this Agreement. The Purchaser
will use their best efforts to promptly obtain all such
authorizations, approvals and consents.
6.3. Necessary Consents. During the term of this Agreement, the
Purchaser will use their best efforts to obtain such written consents
and take such other actions as may be necessary or appropriate to
facilitate the consummation of the transactions contemplated hereby
and by the other Transaction Documents.
6.4. Satisfaction of Conditions Precedent. During the term of this
Agreement, the Purchaser will use their best efforts to satisfy or
cause to be satisfied all the conditions precedent that are set forth
in Section 7.
7. Conditions.
Exhibit 99.1
Page 11
7.1. Conditions Precedent to Each Party's Obligations. The respective
obligations of each party hereunder are subject to the fulfillment or
satisfaction on or before the Closing Date of each of the following
conditions (any one or more of which may be waived in writing by all
of the parties to this Agreement):
7.1.1. Compliance with Law. There shall be no Law enacted,
entered, enforced or deemed applicable to the transactions
contemplated hereby or by the other Transaction Documents
which would prohibit or render illegal the transactions
contemplated hereby or thereby.
7.1.2. No Legal Proceedings or Orders. There shall not have been
instituted, pending or threatened any Legal Proceeding by or
before any Governmental Body, nor shall there be in effect any
Order issued by any Governmental Body, or threat of any Order,
that (i) prevents or seeks to prevent, or (ii) questions the
validity of this Agreement or the other Transaction Documents
or any action taken or to be taken in connection with the
consummation of the transactions contemplated hereby or
thereby.
7.2. Conditions Precedent to Obligations of the Seller. The obligations
of each of the Sellers hereunder are subject to the fulfillment or
satisfaction on or before the Closing Date of each of the following
conditions (any one or more of which may be waived in writing by the
Seller):
7.2.1. Accuracy of Representations and Warranties. The
representations and warranties of the Purchaser set forth in
Section 4 shall be true and accurate in all material respects
on and as of the Closing Date with the same force and effect
as if they had been made at the Closing, and the Seller shall
receive a certificate to such effect signed by an officer of
the Purchaser.
7.2.2. Covenants. The Purchaser shall have performed and complied
in all material respects with all of its covenants required to
be performed by them under this Agreement on or before the
Closing Date.
7.3. Conditions Precedent To Obligations of the Purchaser.
7.3.1. The obligations of the Purchaser hereunder are subject to
the fulfillment or satisfaction on or before the Closing Date
of each of the following conditions (any one or more of which
may be waived in writing by the Purchaser):
7.3.2. Accuracy of Representations and Warranties. The
representations and warranties of each of the Sellers set
forth in Section 3 shall be true and accurate in all material
respects on and as of the Closing Date with the same force and
effect as if they had been made at the Closing, and the
Purchaser shall receive a certificate to such effect signed by
each of the Sellers.
Exhibit 99.1
Page 12
7.3.3. Covenants. Each of the Purchasers shall have performed and
complied in all material respects with all of the covenants
required to be performed by such Seller under this Agreement
on or before the Closing Date.
7.3.4. Documents. The Purchaser shall have received all written
consents, assignments, waivers, authorizations or other
certificates reasonably requested of the Company in writing to
provide for the continuation in full force and effect of any
and all material Contracts of the Company and for each of the
Sellers to consummate the transactions contemplated hereby and
by the other Transaction Documents.
7.3.5. Government Consents. There shall have been obtained on or
before the Closing Date such material Permits and there shall
have been taken such other action, as may be required to
consummate the transactions contemplated hereby and by the
other Transaction Documents by any Government Body having
jurisdiction over the parties and the actions herein proposed
to be taken, including but not limited to requirements under
applicable federal and state securities laws.
7.3.6. Satisfactory Completion of Due Diligence. The Purchaser
shall have (i) received all due diligence materials requested
by the Purchaser from the Company and the Seller and shall be
satisfied in their sole discretion with the results of their
review and analysis of such materials, and (ii) conducted
interviews with such members of the Company's management or
such other personnel as the Purchaser shall have requested and
shall be satisfied in their sole discretion with the results
of such interviews.
8. Further Agreements of the Parties.
8.1. Indemnity. The Seller and, until the Closing, the Company, agrees
to indemnify, defend and hold harmless the Purchaser (and each
officer, director, shareholder, affiliate, agent and permitted
assign thereof) from and against any and all losses, liabilities,
damages, deficiencies, costs or expenses (including interest,
penalties, and attorneys' fees, disbursements and related charges)
(collectively, "Losses") based upon, arising out of or otherwise in
respect of any inaccuracy in or breach of any representations,
warranties, covenants or agreements of the Company or of the Seller
contained in this Agreement or the other Transaction Documents.
8.2. The Purchaser agrees to indemnify, defend and hold harmless the
Company (and each officer, director, shareholder, affiliate, agent
and permitted assign thereof)and the Seller from and against any
and all Losses based upon, arising out of or otherwise in respect
of any inaccuracy in or breach of any representations, warranties,
covenants or agreements of the Purchaser contained in this
Agreement or the other Transaction Documents.
8.3. The indemnification provided for in Section 10 shall be an
exclusive remedy for the parties, and the other individuals and
entities entitled to indemnification thereby.
Exhibit 99.1
Page 13
9. Miscellaneous.
9.1. Survival of Representations and Warranties. The representations
and warranties of the Seller contained in this Agreement shall
survive the Closing for the benefit of the Purchaser until one year
following the Closing Date. The representations and warranties of
the Purchaser shall survive the Closing for the benefit of the
Seller until one year following the Closing Date.
9.2. Certain Definitions.
"Closing" shall have the meaning set forth in Section 1
hereof.
"Closing Date" shall have the meaning set forth in Section 1
hereof.
"Common Stock" means shares of the Company's Common Stock, par
value $.01 per share.
"Confidential Information" shall mean confidential records and
information, including, but not limited to, development, marketing, purchasing,
organizational, strategic, financial, managerial, administrative, manufacturing,
production, distribution and sales information, distribution methods, data,
specifications and processes presently owned or at any time hereafter developed
by a Person or its agents or consultants or used presently or at any time
hereafter in the course of the business of such Person, that are not otherwise
part of the public domain.
"Contract" means any contract, agreement, indenture, note,
bond, loan, instrument, lease, conditional sale contract, mortgage, license,
franchise, insurance policy. commitment or other arrangement or agreement,
whether written or oral.
"Environmental Claim" means any accusation, allegation, notice
of violation, action, claim, Lien, demand, abatement or other Order or direction
(conditional or otherwise) by any Governmental Body or any Person for personal
injury (including sickness, disease or death), tangible or intangible property
damage, damage to the environment, nuisance, pollution, contamination or other
adverse effects on the environment, or for fines, penalties or restrictions
resulting from or based upon the violation, or alleged violation, of any
Environmental Laws, Orders or Permits of or from any Governmental Body relating
to environmental matters connected with the Facilities.
"Environmental Law" means any Law concerning the environment,
or activities that might threaten or result in damage to the environment or
human health, or any Law that is concerned in whole or in part with the
environment and with protecting or improving the quality of the environment and
human and employee health and safety.
Exhibit 99.1
Page 14
"Environmental Matters" means any matter arising out of or
relating to human and employee health and safety or the environment which could
give rise to liability or require the expenditure of money to address.
"Facilities" means real property, leased or operated by the
Company.
"Governmental Body" means any governmental or regulatory body,
whether federal, state, local or foreign, or any agency, instrumentality or
authority thereof, or any court or arbitrator (public or private).
"Indebtedness" means at a particular time, without
duplication, (i) any indebtedness for borrowed money or issued in substitution
for or exchange of indebtedness for borrowed money, including any bank overdraft
or other similar extension of credit, (ii) any indebtedness evidenced by any
note, bond, debenture or other debt security, (iii) any indebtedness for the
deferred purchase price of property or services with respect to which a Person
is liable, contingently or otherwise, as obligor or otherwise (other than trade
payables and other current liabilities incurred in the ordinary course of
business which are not more than 30 days past due), (iv) any commitment by which
a Person assures a creditor against loss (including, without limitation,
contingent reimbursement obligations with respect to letters of credit), (v) any
indebtedness guaranteed in any manner by a Person (including, without
limitation, guarantees in the form of an agreement to repurchase or reimburse),
(vi) any obligations under capitalized leases with respect to which a Person is
liable, contingently or otherwise, as obligor, guarantor or otherwise, or with
respect to which obligations a Person assures a creditor against loss, (vii) any
indebtedness secured by a Lien on a Person's assets and (viii) any unsatisfied
obligation for "withdrawal liability" to a multiemployer plan" as such terms are
defined under ERISA.
"Law" means any federal, state, local or foreign law
(including common law), statute, code, ordinance, rule, regulation or other
requirement or guideline.
"Legal Proceeding" means any judicial, administrative or
arbitral actions, suits, proceedings (public or private), claims or governmental
proceedings.
"Lien" means any lien, pledge, hypothecation, levy, mortgage,
deed of trust, security interest, claim, lease, charge, option, right of first
refusal, easement, or other real estate declaration, covenant, condition,
restriction or servitude, transfer restriction under any shareholder or similar
agreement, encumbrance or any other restriction or limitation whatsoever.
"Material Adverse Change" means any material adverse change in
the business, properties, results of operations, prospects or condition
(financial or otherwise) of the relevant party; provided, however, that
notwithstanding any other provision of this Agreement, none of the following
shall be deemed in themselves, either alone or in combination, to constitute,
and none of the following shall be taken into account in determining whether
there has been or will be, a Material Adverse Change:(a) any failure by the
relevant party to meet internal projections or forecasts or published revenue or
earnings predictions for any period ending (or for which revenues or earnings
are released) on or after the date of this Agreement; (b) any adverse change,
Exhibit 99.1
Page 15
effect, event, occurrence, state of facts or development to the extent
attributable to the announcement or pendency of the transaction documented by
this Agreement (including any cancellations of or delays in customer orders, any
reduction in sales, any disruption in supplier, distributor, partner or similar
relationships or any loss of employees); (c) any adverse change, effect, event,
occurrence, state of facts or development attributable to conditions affecting
the industries in which the relevant party participates, the U.S. economy as a
whole or foreign economies in any locations where the relevant party or any of
its subsidiaries has material operation or sales; (d) any adverse change,
effect, event, occurrence, state of facts or development attributable or
relating to (i) out-of-pocket fees and expenses (including legal, accounting,
and other fees and expenses) incurred in connection with the transactions
contemplated by this Agreement, or (ii) the payment of any amounts due to, or
the provision of any other benefits (including benefits relating to acceleration
of stock options) to, any officers or employees under employment contracts,
non-competition agreements, employee benefit plans, severance arrangements or
other arrangements in existence as of the date of this Agreement, (if any
adverse change, effect, event, occurrence, state of facts or development
resulting from or relating to compliance with the terms of, or the taking of any
action required by, this Agreement); (e) any adverse change, effect, event,
occurrence, state of facts or development arising from or relating to any change
in accounting requirements or principles or any change in applicable laws, rules
or regulations or the interpretation thereof; or (f) any adverse change, effect,
event, occurrence, state of facts or development arising from or relation to
actions required to be taken under applicable laws, rules, regulations,
contracts or agreements.
"Order" means any order, consent, consent order, injunction,
judgment, decree, consent decree, ruling, writ, assessment or arbitration award.
"Permits" means any approvals, authorizations, registrations,
consents, licenses, permits or certificates by any Governmental Body.
"Person" means any individual, corporation, partnership, firm,
joint venture, association, joint-stock company, trust, unincorporated
organization, Governmental Body or other entity.
"Representatives" of a Person means its officers, employees,
agents, legal advisors and accountants.
"Shares" means the Common Stock to be purchased hereunder.
9.3. Expenses. Except as otherwise expressly provided herein, all costs
and expenses incurred in connection with the Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such expenses whether or not the transaction is
consummated.
9.4. Further Assurances. The Seller and the Purchaser agree to execute
and deliver, at the requesting party's expense, such other
reasonable documents or agreements
Exhibit 99.1
Page 16
as may be necessary or desirable for the implementation of this
Agreement and the consummation of the transactions contemplated
hereby or by the other Transaction Documents.
9.5. Submission to Jurisdiction; Waiver of Jury Trial; and Consent to
Service of Process.
9.5.1. The parties hereto hereby irrevocably submit to the
exclusive jurisdiction of any federal or state court located
within the State of New York over any dispute arising out of
or relating to this Agreement or any of the transactions
contemplated hereby or by the other Transaction Documents and
each party hereby irrevocably agrees that all claims in
respect of such dispute or any suit, action or proceeding
related thereto may be heard and determined in such courts.
The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now
or hereafter have to the laying of venue of any such dispute
brought in such court or any defense of inconvenient forum for
the maintenance of such dispute. Each of the parties hereto
agrees that a judgment in any such dispute may be enforced in
other jurisdictions by suit on the judgment or in any other
manner provided by law.
9.5.2. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY OF THE
OTHER TRANSACTION DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PARTIES' ACCEPTANCE OF THIS AGREEMENT.
9.5.3. Each of the parties hereto hereby consents to process being
served by any party to this Agreement in any suit, action or
proceeding, by the mailing of a copy thereof in accordance
with the provisions of Section 11.9.
9.6. Entire Agreement; Amendments and Waivers. This Agreement
(including any schedules and exhibits hereto) represents the entire
understanding and agreement between the parties hereto with respect
to the subject matter hereof and can be amended, supplemented or
changed, and any provision hereof can be waived, only by written
instrument making specific reference to this Agreement signed by
the parties hereto. No action taken pursuant to this Agreement,
including without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representation, warranty,
covenant or agreement contained herein. The waiver by any party
hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such
breach or as a waiver of any other or subsequent breach. No failure
on the part of any party to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right,
power
Exhibit 99.1
Page 17
or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.
9.7. Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Florida
without giving effect to the principles of conflict of laws
thereunder.
9.8. Table of Contents and Headings. The table of contents and section
headings of this Agreement are for reference purposes only and are
to be given no effect in the construction or interpretation of this
Agreement.
9.9. Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have
been duly given when (a) delivered by hand, (b) sent by facsimile
(with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested (provided that
facsimile notice shall be deemed received on the next business day
if received after 5:00 p.m. Eastern Standard Time), or (c) when
received by the addressee, if sent by a nationally recognized
overnight delivery service, in each case to the appropriate
addresses and telecopier numbers set forth below (or to such other
addresses and facsimile numbers as a party may designate by notice
to the other parties):
Exhibit 99.1
Page 18
If to Purchaser to:
------------------
Thomas Banks Ltd.
Attn: Chester Rothrock
#4-2443 Barrio Don Bosco
San Jose, Costa Rica
If to the Company or Seller to:
------------------------------
The Finx Group, Inc.
Attn: Lewis S. Schiller
249 Saw Mill River Road
Elmsford, NY 10523
(914) 592-6014 (facsimile)
9.10. Severability. If any term, provision, covenant or condition of
this Agreement or part thereof, or the application thereof to any
Person, place or circumstance shall be held to be invalid,
unenforceable or void by a court of competent jurisdiction, the
remainder of this Agreement and such term, provision, covenant or
condition shall remain in full force and effect, and any such
invalid, unenforceable or void term, provision, covenant or
condition shall be deemed, without further action on the part of
the parties hereto, modified, amended and limited, and the court
shall have the power to modify, amend, and limit such term,
provision, covenant or condition, to the extent necessary to render
the same and the remainder of this Agreement valid, enforceable and
lawful.
9.11. Binding Effect, Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective
successors and permitted assigns. Nothing in this Agreement shall
create or be deemed to create any third party beneficiary rights or
any other rights of any kind in any Person or entity not a party to
this Agreement except as specifically provided herein. No
assignment of this Agreement or of any rights or obligations
hereunder may be made by the Seller (by operation of law or
otherwise) without the prior written consent of the Purchaser and
any attempted assignment without such required consent shall be
void.
9.12. Confidential Information. All Confidential Information with
respect to any party hereto is considered secret and will be
disclosed in confidence. Each party hereto acknowledges that, it
may have access to and become acquainted with Confidential
Information of another party. Each party hereto agrees that it will
not prior to the Closing Date (or in the event of the termination
of this Agreement in accordance with its terms) and at all times
thereafter, directly or indirectly for any reason whatsoever,
disclose or use any such
Exhibit 99.1
Page 19
9.13.
Confidential Information. All records, files, drawings, documents,
equipment and other tangible items, wherever located, relating in any
way to or containing Confidential Information, which any party has
prepared or shall in the future prepare, shall be and remain the sole
and exclusive property of such party and shall be included in the
Confidential Information. Upon termination of this Agreement in
accordance with its terms, the parties shall promptly deliver any and
all of the Confidential Information and copies thereof of any other
party, not previously delivered to such party, that may be in its
possession or under its control. The foregoing restrictions shall not
apply to the use, divulgence, disclosure or grant of access to
Confidential Information to the extent, but only to the extent, (i)
expressly permitted or required pursuant to any other written
agreement between the parties, (ii) such Confidential Information has
been publicly disclosed (not due to a breach by any party of its
obligations hereunder, or by breach of any other Person, of a
fiduciary or confidential obligation to a party) or (iii) a party is
required to disclose Confidential Information by or to any court of
competent jurisdiction or any other Governmental Body; provided,
however, that the party required to disclose such Confidential
Information shall, prior to any such disclosure, immediately notify
the party which owns the Confidential Information of such requirement
and provided further, that such party shall have the right, at its
expense, to object to such disclosures and to seek confidential
treatment of any Confidential Information to be so disclosed on such
terms as it shall determine.
9.14. Public Announcement. The parties shall cooperate with respect to
any public announcement relating to the transactions contemplated
hereby or by the other Transaction Documents; and neither party
will issue any public statement announcing such transaction without
the prior consent of the others, except as such party in good faith
(based upon advice of counsel) believes is required by law and
following notice to the other party.
9.15. Counterparts. This Agreement may be executed in multiple
counterparts each of which shall be an original but all of which
together shall constitute one and the same instrument. This
Agreement may also be executed and delivered by exchange of
facsimile copies showing the signatures of the parties, and those
signatures need not be affixed to the same copy. The facsimile
copies showing the signatures of the parties will constitute
originally signed copies of the Agreement requiring no further
execution.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
Exhibit 99.1
Page 20
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above.
ATTEST GRANITE TECHNOLOGIES
ACQUISITION CORP.
________________________ By: ________________________
SIGNATURE LEWIS S. SCHILLER
CHIEF EXECUTIVE OFFICER
------------------------
PRINT NAME
.........................................................................
ATTEST GRANITE TECHNOLOGIES, INC.
________________________ By: ________________________
SIGNATURE LEWIS S. SCHILLER
CHIEF EXECUTIVE OFFICER
------------------------
PRINT NAME
.........................................................................
ATTEST: Thomas Banks Ltd.
________________________ By: ________________________
SIGNATURE CHESTER ROTHROCK
MANAGING DIRECTOR
------------------------
PRINT NAME
Exhibit 99.1
Page 21
Exhibit 99.2
STOCK PURCHASE AGREEMENT
BY AND AMONG
THE FINX GROUP, INC.,
EACH OF THE SHAREHOLDERS OF BIZCHASE, INC.,
BIZCHASE, INC.,
AND
THOMAS BANKS LTD.
Dated: As of September 30, 2002
Exhibit 99.2
Page 1
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of September 30, 2002 (the
"Agreement"), among Thomas Banks Ltd., a Cayman corporation with an office at
#4-2443 Barrio Don Bosco, San Jose, Costa Rica (the "Purchaser"), Bizchase,
Inc., a corporation organized under the laws of the State of Delaware with an
office at 249 Saw Mill River Road, Elmsford, New York 10523, (the "Company"),
and The Finx Group, Inc., a corporation organized under the laws of the State of
Delaware, with an office at 249 Saw Mill River Road, Elmsford, New York 10523
and those individuals and entities whose names appear on the signature page
hereof in their capacity as holders of 100% of the outstanding common stock of
the Company (collectively referred to as the "Sellers").
WITNESSETH:
--------------------
The Sellers collectively hold 100% the Company's shares (the
"Shares") of common stock, par value $.01 per share (the "Common Stock"), and
100% of the Company's preferred stock, of the Company, a corporation organized
under the laws of the State of Delaware;
The Purchaser desires to acquire from the Sellers, and the
Sellers collectively desire to sell to the Purchaser, for the consideration
hereinafter provided, the Shares; and
Certain terms used in this Agreement are defined in Section
9.2 of this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual
covenants and agreements hereinafter contained, the parties hereto, intending to
be legally bound, hereby agree as follows:
Exhibit 99.2
Page 2
1. Sale and Purchase of Shares; the Closing.
1.1. Sale and Purchase of Shares. Subject to the terms and conditions
of this Agreement and on the basis of the representations,
warranties, covenants and agreements herein contained, on the
Closing Date, the Sellers shall sell, assign and convey to the
Purchaser, and the Purchaser shall purchase, acquire and accept
from the Sellers, all of the Shares of such Sellers. At the
Closing, the Sellers shall deliver one or more stock certificates
representing the Shares of the Sellers duly endorsed for transfer
to the Purchaser.
1.2. The Closing. The consummation of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of
the parties to the transaction upon execution of this Agreement on
September 30, 2002 or at such other time and date as the parties
hereto mutually agree (the "Closing Date").
2. Consideration.
2.1. Consideration. The consideration for the Shares shall be as
follows:
2.1.1. One Dollar ($1).
2.1.2. The cancellation of indebtedness owed by the Company or its
subsidiary to the Sellers and the Sellers' affiliates and or
subsidiaries.
3. Representations and Warranties of the Sellers. The Sellers hereby
represent and warrant to the Purchaser, that to the best of their
knowledge:
3.1. Organization and Good Standing.
3.1.1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to own,
lease and operate its properties and to carry on its business
as it is now conducted and as it is proposed to be conducted.
3.1.2. The minute books of the Company contain accurate records of
all meetings and all other material corporate action of the
Company's board of directors (including any committees
thereof) and its stockholders since the date of the Company's
incorporation.
3.2. Authorization of Agreement. The Sellers have all requisite
capacity, power and authority to execute and deliver this Agreement
and each other agreement, document, instrument or certificate
contemplated by this Agreement or to be executed by such Sellers in
connection with the consummation of the transactions contemplated
by this Agreement (this Agreement and the other agreements,
documents, instruments or
Exhibit 99.2
Page 3
certificates delivered pursuant to this Agreement are hereinafter
referred to as the "Transaction Documents"), and to perform fully
its obligations hereunder and thereunder. This Agreement has been,
and each of the other Transaction Documents will be (when executed
and delivered by the Sellers), duly and validly authorized,
executed and delivered by the Sellers and this Agreement
constitutes, and each of the other Transaction Documents will
constitute (when executed and delivered by the Sellers), legal,
valid and binding obligations of the Sellers, enforceable against
the Sellers in accordance with their respective terms, subject, as
to enforceability, to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law
or in equity).
3.3. Subsidiaries. The Company has no subsidiaries and does not own any
other capital stock or other proprietary interest, directly or
indirectly, in any corporation, association, trust, partnership,
joint venture or other entity or have any agreement to acquire any
such capital stock or other proprietary interest except for the
following:
3.3.1. The Company owns 19% of Shopclue.com, Inc's. common stock
and such ownership is deemed transferred to Purchaser by
Sellers upon execution of this Agreement.
3.4. No Conflicts; Consents of Third Parties. The execution and
delivery by the Sellers of this Agreement and the other Transaction
Documents, the consummation of the transactions contemplated hereby
or thereby, and the compliance by the Sellers with any of the
provisions hereof or thereof does not and will not (i) conflict
with, or result in the breach of, any provision of the certificate
of incorporation or by-laws of the Company; (ii) conflict with,
violate, result in the breach or termination of, or constitute a
default or give rise to any "takeback" right or right of
termination or acceleration or right to increase the obligations or
otherwise modify the terms thereof under any Contract, Permit or
Order to which the Company is a party or by which the Company or
the properties or assets of the Seller are bound; (iii) constitute
a violation of any Law applicable to the Company; or (iv) result in
the creation of any Lien upon the properties or assets of the
Company or the Sellers.
3.5. Capitalization.
3.5.1. The authorized capital stock of the Company consists of
1,000 shares of Common Stock and 1,500 shares of preferred
stock. As of the date hereof, 1,000 shares of Common Stock are
issued and outstanding, all of which are owned of record and
beneficially by the Sellers and constitute the Shares. As of
the date hereof, there are 100 shares of Company preferred
stock issued and outstanding, all of which are owned of record
and beneficially by the Sellers. There is no existing option,
warrant, call, right, commitment or other agreement of any
character to which the Company is a party requiring, and there
are no securities of the Company outstanding which upon
conversion or exchange would require, the issuance, sale or
Exhibit 99.2
Page 4
transfer of any additional shares of capital stock or other
equity securities of the Company or other securities
convertible into, exchangeable for or evidencing the right to
subscribe for or purchase shares of capital stock or other
equity securities of the Company. Neither the Company nor the
Sellers is a party to any voting trust or other voting
agreement with respect to any shares of capital stock or to
any agreement relating to the issuance, sale, redemption,
transfer or other disposition of capital stock of the Company
3.5.2. The Shares purchased by the Purchaser will, at the Closing,
constitute 100% all of the issued and outstanding capital
stock of the Company on a fully diluted basis.
3.6. Financial Statements. Set forth on Schedule 3.6 of the Disclosure
Schedules are (i) copies of the Company's unaudited balance sheets
as of June 30, 2002 and December 31, 2001 and the related unaudited
statements of income and of cash flows for the three and six month
periods ended June 30, 2002 and 2001, (the "Unaudited Financial
Statements"). The Unaudited Financial Statements have been prepared
on a going concern basis, which contemplates the realization of
assets and the liquidation of liabilities in the normal course of
business. However, the Company has a history of net losses and has
a working capital deficiency. The Unaudited Financial Statements do
not include any adjustments that would result should the Company be
unable to continue as a going concern.
3.7. There have not been any amendments or changes in the certificate
of incorporation or the by-laws of the Company.
3.8. The Company has caused to be done all things materially necessary
to maintain, preserve and renew its corporate existence and all
material licenses, authorizations and permits necessary to the
conduct of its business.
4. Representations and Warranties of the Purchaser. The Purchaser hereby,
jointly and severally, represent and warrant to the Sellers that:
4.1. Organization and Good Standing. The Purchaser is a corporation
duly organized, validly existing and in good standing. The
Purchaser has full corporate power and authority to own, lease and
operate their properties and to carry on their business as it is
now conducted and as it is proposed to be conducted.
4.2. Authorization of Agreement. The Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement
and each of the other Transaction Documents to be executed by the
Purchaser in connection with the consummation of the transactions
contemplated hereby and thereby, and to perform fully their
obligations hereunder and thereunder. The execution, delivery and
performance by the Purchaser of this Agreement and each of the
other Transaction Documents to be executed by the Purchaser have
been duly authorized by all necessary action on behalf of the
Purchaser.
Exhibit 99.2
Page 5
This Agreement has been, and each of the other Transaction
Documents will be (when executed and delivered by the Purchaser),
duly and validly executed and delivered by the Purchaser and
(assuming the due authorization, execution and delivery by the
other parties hereto and thereto) this Agreement constitutes, and
each of the other Transaction Documents will constitute (when
executed and delivered by the Purchaser), legal, valid and binding
obligations of the Purchaser, enforceable against the Purchaser in
accordance with their respective terms, subject, as to
enforceability, to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject to general principles of
equity (regardless of whether enforcement is sought in a proceeding
at law or in equity).
4.3. No Conflicts; Consents of Third Parties. The execution and
delivery by the Purchaser of this Agreement and the other
Transaction Documents to be executed by the Purchaser, the
consummation of the transactions contemplated hereby or thereby,
and the compliance by the Purchaser with any of the provisions
hereof or thereof does not and will not (a) conflict with, or
result in the breach of, the certificate of incorporation or
by-laws of the Purchaser, (b) conflict with, violate, result in the
breach of, or constitute a default under any Contract or Order to
which the Purchaser is a party or by which the Purchaser or their
properties or assets are bound or (c) constitute a violation by the
Purchaser of any Law applicable to the Purchaser. No consent,
waiver, approval, Order, Permit or authorization of, or declaration
or filing with, or notification to, any Person or Governmental Body
is required on the part of the Purchaser in connection with the
execution and delivery of this Agreement or the other Transaction
Documents to be executed by the Purchaser or the compliance by the
Purchaser with any of the provisions hereof or thereof which has
not been made or obtained.
4.4. Litigation. There are no Legal Proceedings against the Purchaser
pending or, to the best knowledge of the Purchaser, threatened that
question the validity of this Agreement or any of the other
Transaction Documents or any action taken or to be taken by the
Purchaser in connection with the consummation of the transactions
contemplated hereby or thereby. There is no action, suit,
investigation or proceeding (or, to the knowledge of the Purchaser,
any basis therefor) pending against, or to the knowledge of the
Purchaser threatened, against or affecting the Purchaser, any of
their Subsidiaries or any of their properties before any court or
arbitrator or any governmental body, agency or official that if
adversely determined against the Purchaser, would result in a
Material Adverse Change to the Purchaser.
4.5. No Misrepresentation. No representation or warranty of the
Purchaser contained in this Agreement (including the Disclosure
Schedules hereto) or in any other Transaction Document furnished to
the Seller pursuant to the terms hereof contains or will contain
any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained
herein or therein, in light of the circumstances under which they
were made, not misleading. The Purchaser does not know of any facts
which have caused or in the future are reasonably likely to cause a
Material Adverse Change which has not been disclosed herein or in a
Disclosure
Exhibit 99.2
Page 6
Schedule hereto. The representations and warranties contained in
this Section 4.11 or elsewhere in this Agreement or in any other
Transaction Document shall not be affected or deemed waived by
reason of the fact that any Seller and/or any Representative of any
Sellers knows or should have known that any such representation or
warranty is or might be inaccurate in any respect.
5. Additional Representations, Warranties and Covenants.
5.1. Title and Investment Representations. The Sellers represents and
warrants to, and covenants and agrees with the Purchaser that, it
has good and marketable title to the Shares of the Sellers, free
and clear of all Liens of any kind or nature whatsoever and that at
the Closing, the Purchaser will obtain good and marketable title to
such Shares, free and clear as aforesaid.
5.2. Information Representations. The Sellers represents and warrants
that (i) such Sellers, and his Representatives as deemed necessary
by such Sellers (including such Sellers' professional, tax and
other advisors), have carefully reviewed the materials (the
"Materials") furnished by the Purchaser to such Sellers in
connection with the transactions contemplated by this Agreement and
(ii) such Sellers, and such Seller's Representatives, have been
granted the opportunity to ask questions of, and receive answers
from, Representatives of the Purchaser concerning the Purchaser and
to obtain any additional information that such Sellers deemed
necessary to verify the accuracy of the information contained
herein.
5.3. Advise of Changes. During the period from the date of this
Agreement until the earlier of the Closing Date, the Company will
promptly advise the Purchaser in writing of the following, to the
extent it has knowledge of the same: (a) of any event occurring
subsequent to the date of this Agreement that would render any
representation or warranty of the Sellers contained in this
Agreement, if made on or as of the date of such event or the
Closing Date, materially inaccurate, (b) of any Material Adverse
Change, and (c) of any breach by the Sellers of any covenant or
agreement contained in any Transaction Document.
5.4. Maintenance of Business. From the date hereof until the earlier of
the Closing Date and the termination of this Agreement in
accordance with its terms, the Sellers shall cause the Company to:
5.4.1. cause to be done all things necessary to maintain, preserve
and renew its (i) corporate existence and all material
licenses, authorizations and permits necessary to the conduct
of its businesses and (ii) relationships with customers,
suppliers, employees and others in substantially the same
manner as it has prior to the date hereof;
5.4.2. comply in all material respects with all applicable Laws;
and
Exhibit 99.2
Page 7
5.4.3. maintain proper books of record and account which present
fairly in all material respects its financial condition and
results of operations and make provisions on its financial
statements for all such proper reserves as in each case are
required in accordance with generally accepted accounting
principles, consistently applied.
5.5. Conduct of Business. During the period from the date of this
Agreement until the Closing Date, the Company will continue to
conduct its business and maintain its business relationships in the
ordinary and usual course and will not (except to the extent, but
only to the extent, deemed necessary by the officers and directors
of the Company in fulfilling their fiduciary duties), without the
prior written consent of the Purchaser,:
5.5.1. (i) declare, set aside or authorize the payment of, any
dividend or other distribution in respect of any shares of
capital stock of the Company or repurchase, redeem or acquire
any of the outstanding shares of any class of capital stock or
(ii) pay or otherwise distribute any other amounts or assets
to the Sellers, whether as compensation or otherwise;
5.5.2. split or combine the outstanding shares of its capital
stock of any class or enter into any recapitalization or
agreement affecting the number or rights of outstanding shares
of any class of its capital stock;
5.5.3. (i) award or pay any bonuses to employees of the Company,
(ii) enter into or modify or amend any employment, deferred
compensation, severance or similar agreement, (iii) increase
or agree to increase the compensation payable or to become
payable by it to any of the Company's directors, officers,
employees, agents or Representatives or (iv) increase or agree
to increase the coverage or benefits available under any
severance pay, termination pay, vacation pay, company awards,
salary continuation for disability, sick leave, deferred
compensation, bonus or other incentive compensation,
insurance, pension or other employee benefit plan, payment or
arrangement made to, for or with such directors, officers,
employees, agents or Representatives;
5.5.4. change accounting principles, methods or policies;
5.5.5. enter into any Contract requiring payments in excess of
$5,000, or conduct its business other than in the ordinary
course of business consistent with past practice;
5.5.6. (i) incur or repay any Indebtedness, (ii) make any loans,
advances or capital contributions to any other Person or (iii)
assume, guarantee, endorse or otherwise become liable for the
obligations of any other Person.
5.5.7. fail to maintain and keep its properties in good repair,
working order and condition, normal wear and tear excepted;
Exhibit 99.2
Page 8
5.5.8. fail to comply with all other obligations which it incurred
pursuant to any Contract or promptly pay or discharge any
current liabilities, as such obligations become due, unless
and to the extent that the same are being contested in good
faith and by appropriate proceedings and adequate reserves (as
determined in accordance with generally accepted accounting
principles, consistently applied) have been established on its
books with respect thereto;
5.5.9. mortgage, pledge or subject to any Lien any of its assets,
or acquire any assets or sell, assign, transfer, convey, lease
or otherwise dispose of any assets of the Company (other than
the sale of inventory in the ordinary course of business
consistent with past practice);
5.5.10. discharge or satisfy any Lien, or pay any obligation or
liability (fixed or contingent), except in the ordinary course
of business consistent with past practice and which, in the
aggregate, would not be material to the Company;
5.5.11. transfer or grant any rights under any concessions, leases,
licenses, agreements or Intellectual Property used by the
Company in its business;
5.5.12. make or commit to make any capital expenditures or capital
additions or betterments;
5.5.13. institute or settle any Legal Proceeding;
5.5.14. amend its certificate of incorporation or by-laws;
5.5.15. issue, sell or transfer any shares of its capital stock of
any class or any other of its securities, or issue or create
any options, warrants, calls, rights, commitments,
subscriptions, convertible securities or other agreements of
any character requiring the Company to issue, sell or transfer
any shares of capital stock, or accelerate the vesting of any
outstanding security;
5.5.16. merge, consolidate or reorganize with, or acquire, any
entity;
5.5.17. agree to any audit assessment by any Tax authority or fail
to pay and discharge when payable all Taxes, assessments and
governmental charges imposed upon its properties or upon the
income or profits therefrom (in each case before the same
becomes delinquent and before penalties accrue thereon) and
all claims for labor, materials or supplies which if unpaid
would by law become a Lien upon any of its property;
5.5.18. change any insurance coverage, issue any certificates of
insurance or fail to continue in force with nationally
recognized insurance companies adequate insurance covering
risks of such types and in such amounts as are customary for
Persons engaged in similar lines of business;
Exhibit 99.2
Page 9
5.5.19. enter into any transaction with, or become party to any
Contract with, any officer, director, or Affiliate (or any
relative of any of them) of the Company; or
5.5.20. agree to do, or enter into negotiations with respect to,
any of the things described in the preceding clauses in this
Section 5.5.
5.6. Regulatory Approvals. The Sellers will, and will cause the Company
to, promptly execute and file, or join in the execution and filing,
of any application or other document that may be necessary in order
to obtain the authorization, approval or consent of any
Governmental Body which may be reasonably required, or which the
Purchaser may reasonably request in connection with the
consummation of the transactions contemplated by this Agreement.
The Sellers will use its, and will cause the Company to use its,
best efforts to promptly obtain all such authorizations, approvals
and consents.
5.7. Necessary Consents. During the period from the date of this
Agreement until the Closing Date, the Sellers will use its, and
will cause the Company to use its, best efforts to obtain such
written consents and take such other actions as may be necessary or
appropriate to facilitate the consummation of the transactions
contemplated hereby and by the other Transaction Documents and to
allow the Purchaser to carry on the Company's business after the
Closing Date.
5.8. Access to Information. During the period from the date of this
Agreement until the earlier of the Closing Date or the termination
of this Agreement in accordance with its terms, the Sellers will,
and shall cause the Company to, (i) allow the Purchaser and its
Representatives reasonable access to the files, books, records,
personnel and offices of the Company, including, without
limitation, any and all information relating to the Company's
Taxes, commitments, Contracts, and real, personal and intangible
property and financial condition, (ii) furnish promptly to the
Purchaser all information concerning the Company's business,
properties and personnel as the Purchaser may reasonably request,
and (iii) make available to the Purchaser the appropriate
individuals (including attorneys, accountants and other
professionals) for discussion of the Company's business, properties
and personnel as the Purchaser may reasonably request. The Sellers
will cause the Company's accountants to cooperate with the
Purchaser and its Representatives in making available to the
Purchaser all financial information reasonably requested,
including, without limitation, the right to examine all working
papers pertaining to all Tax returns and financial statements
prepared, reviewed or audited by such accountants.
5.9. Satisfaction of Conditions Precedent. During the period from the
date of this Agreement until the Closing Date, the Sellers will use
its, and will cause the Company to use its, best efforts to satisfy
or cause to be satisfied all the conditions precedent that are set
forth in Section 7.
Exhibit 99.2
Page 10
5.10. Directors and Officers of the Company. As of the Closing Date, all
officer and directors of the Company shall resign and shall be
replaced by the Purchaser's nominees.
6. Covenants of the Purchaser.
6.1. Advise of Changes. During the period from the date of this
Agreement until the Closing Date, the Purchaser will promptly
advise the Sellers in writing (a) of any event occurring subsequent
to the date of this Agreement that would render any representation
or warranty of the Purchaser, as the case may be, contained in this
Agreement, if made on or as of the date of such event or the
Closing Date, materially inaccurate in any material respect, and
(b) of any breach by the Purchaser of any covenant or agreement
contained in this Agreement.
6.2. Regulatory Approvals. The Purchaser will promptly execute and
file, or join in the execution and filing, of any application or
other document that may be necessary in order to obtain the
authorization, approval or consent of any Governmental Body, or
which the Sellers may reasonably request in connection with the
consummation of the transactions contemplated by this Agreement.
The Purchaser will use their best efforts to promptly obtain all
such authorizations, approvals and consents.
6.3. Necessary Consents. During the term of this Agreement, the
Purchaser will use their best efforts to obtain such written
consents and take such other actions as may be necessary or
appropriate to facilitate the consummation of the transactions
contemplated hereby and by the other Transaction Documents.
6.4. Satisfaction of Conditions Precedent. During the term of this
Agreement, the Purchaser will use their best efforts to satisfy or
cause to be satisfied all the conditions precedent that are set
forth in Section 7.
7. Conditions.
7.1. Conditions Precedent to Each Party's Obligations. The respective
obligations of each party hereunder are subject to the fulfillment
or satisfaction on or before the Closing Date of each of the
following conditions (any one or more of which may be waived in
writing by all of the parties to this Agreement):
7.1.1. Compliance with Law. There shall be no Law enacted,
entered, enforced or deemed applicable to the transactions
contemplated hereby or by the other Transaction Documents
which would prohibit or render illegal the transactions
contemplated hereby or thereby.
7.1.2. No Legal Proceedings or Orders. There shall not have been
instituted, pending or threatened any Legal Proceeding by or
before any Governmental Body, nor shall there be in effect any
Order issued by any Governmental Body, or threat of any Order,
that (i) prevents or seeks to prevent, or (ii) questions the
validity of this
Exhibit 99.2
Page 11
Agreement or the other Transaction Documents or any action
taken or to be taken in connection with the consummation of
the transactions contemplated hereby or thereby.
7.2. Conditions Precedent to Obligations of the Sellers. The
obligations of each of the Sellers hereunder are subject to the
fulfillment or satisfaction on or before the Closing Date of each
of the following conditions (any one or more of which may be waived
in writing by the Sellers):
7.2.1. Accuracy of Representations and Warranties. The
representations and warranties of the Purchaser set forth in
Section 4 shall be true and accurate in all material respects
on and as of the Closing Date with the same force and effect
as if they had been made at the Closing, and the Sellers shall
receive a certificate to such effect signed by an officer of
the Purchaser.
7.2.2. Covenants. The Purchaser shall have performed and complied
in all material respects with all of its covenants required to
be performed by them under this Agreement on or before the
Closing Date.
7.3. Conditions Precedent To Obligations of the Purchaser.
7.3.1. The obligations of the Purchaser hereunder are subject to
the fulfillment or satisfaction on or before the Closing Date
of each of the following conditions (any one or more of which
may be waived in writing by the Purchaser):
7.3.2. Accuracy of Representations and Warranties. The
representations and warranties of each of the Sellers set
forth in Section 3 shall be true and accurate in all material
respects on and as of the Closing Date with the same force and
effect as if they had been made at the Closing, and the
Purchaser shall receive a certificate to such effect signed by
each of the Sellers.
7.3.3. Covenants. Each of the Purchasers shall have performed and
complied in all material respects with all of the covenants
required to be performed by such Sellers under this Agreement
on or before the Closing Date.
7.3.4. Documents. The Purchaser shall have received all written
consents, assignments, waivers, authorizations or other
certificates reasonably requested of the Company in writing to
provide for the continuation in full force and effect of any
and all material Contracts of the Company and for each of the
Sellers to consummate the transactions contemplated hereby and
by the other Transaction Documents.
7.3.5. Government Consents. There shall have been obtained on or
before the Closing Date such material Permits and there shall
have been taken such other action, as may be required to
consummate the transactions contemplated hereby and by the
other Transaction Documents by any Government Body having
jurisdiction over the
Exhibit 99.2
Page 12
parties and the actions herein proposed to be taken, including
but not limited to requirements under applicable federal and
state securities laws.
7.3.6. Satisfactory Completion of Due Diligence. The Purchaser
shall have (i) received all due diligence materials requested
by the Purchaser from the Company and the Sellers and shall be
satisfied in their sole discretion with the results of their
review and analysis of such materials, and (ii) conducted
interviews with such members of the Company's management or
such other personnel as the Purchaser shall have requested and
shall be satisfied in their sole discretion with the results
of such interviews.
8. Further Agreements of the Parties.
8.1. Indemnity. The Sellers and, until the Closing, the Company, agrees
to indemnify, defend and hold harmless the Purchaser (and each
officer, director, shareholder, affiliate, agent and permitted
assign thereof) from and against any and all losses, liabilities,
damages, deficiencies, costs or expenses (including interest,
penalties, and attorneys' fees, disbursements and related charges)
(collectively, "Losses") based upon, arising out of or otherwise in
respect of any inaccuracy in or breach of any representations,
warranties, covenants or agreements of the Company or of the
Sellers contained in this Agreement or the other Transaction
Documents.
8.2. The Purchaser agrees to indemnify, defend and hold harmless the
Company (and each officer, director, shareholder, affiliate, agent
and permitted assign thereof)and the Sellers from and against any
and all Losses based upon, arising out of or otherwise in respect
of any inaccuracy in or breach of any representations, warranties,
covenants or agreements of the Purchaser contained in this
Agreement or the other Transaction Documents.
8.3. The indemnification provided for in Section 10 shall be an
exclusive remedy for the parties, and the other individuals and
entities entitled to indemnification thereby.
9. Miscellaneous.
9.1. Survival of Representations and Warranties. The representations
and warranties of the Sellers contained in this Agreement shall
survive the Closing for the benefit of the Purchaser until one year
following the Closing Date. The representations and warranties of
the Purchaser shall survive the Closing for the benefit of the
Sellers until one year following the Closing Date.
9.2. Certain Definitions.
"Closing" shall have the meaning set forth in Section 1
hereof.
"Closing Date" shall have the meaning set forth in Section 1
hereof.
Exhibit 99.2
Page 13
"Common Stock" means shares of the Company's Common Stock, par
value $.01 per share.
"Confidential Information" shall mean confidential records and
information, including, but not limited to, development, marketing, purchasing,
organizational, strategic, financial, managerial, administrative, manufacturing,
production, distribution and sales information, distribution methods, data,
specifications and processes presently owned or at any time hereafter developed
by a Person or its agents or consultants or used presently or at any time
hereafter in the course of the business of such Person, that are not otherwise
part of the public domain.
"Contract" means any contract, agreement, indenture, note,
bond, loan, instrument, lease, conditional sale contract, mortgage, license,
franchise, insurance policy. commitment or other arrangement or agreement,
whether written or oral.
"Environmental Claim" means any accusation, allegation, notice
of violation, action, claim, Lien, demand, abatement or other Order or direction
(conditional or otherwise) by any Governmental Body or any Person for personal
injury (including sickness, disease or death), tangible or intangible property
damage, damage to the environment, nuisance, pollution, contamination or other
adverse effects on the environment, or for fines, penalties or restrictions
resulting from or based upon the violation, or alleged violation, of any
Environmental Laws, Orders or Permits of or from any Governmental Body relating
to environmental matters connected with the Facilities.
"Environmental Law" means any Law concerning the environment,
or activities that might threaten or result in damage to the environment or
human health, or any Law that is concerned in whole or in part with the
environment and with protecting or improving the quality of the environment and
human and employee health and safety.
"Environmental Matters" means any matter arising out of or
relating to human and employee health and safety or the environment which could
give rise to liability or require the expenditure of money to address.
"Facilities" means real property, leased or operated by the
Company.
"Governmental Body" means any governmental or regulatory body,
whether federal, state, local or foreign, or any agency, instrumentality or
authority thereof, or any court or arbitrator (public or private).
"Indebtedness" means at a particular time, without
duplication, (i) any indebtedness for borrowed money or issued in substitution
for or exchange of indebtedness for borrowed money, including any bank overdraft
or other similar extension of credit, (ii) any indebtedness evidenced by any
note, bond, debenture or other debt security, (iii) any indebtedness for the
deferred purchase price of property or services with respect to which a Person
is liable, contingently or otherwise, as obligor or otherwise (other than trade
payables and
Exhibit 99.2
Page 14
other current liabilities incurred in the ordinary course of business which are
not more than 30 days past due), (iv) any commitment by which a Person assures a
creditor against loss (including, without limitation, contingent reimbursement
obligations with respect to letters of credit), (v) any indebtedness guaranteed
in any manner by a Person (including, without limitation, guarantees in the form
of an agreement to repurchase or reimburse), (vi) any obligations under
capitalized leases with respect to which a Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or with respect to which
obligations a Person assures a creditor against loss, (vii) any indebtedness
secured by a Lien on a Person's assets and (viii) any unsatisfied obligation for
"withdrawal liability" to a multiemployer plan" as such terms are defined under
ERISA.
"Law" means any federal, state, local or foreign law
(including common law), statute, code, ordinance, rule, regulation or other
requirement or guideline.
"Legal Proceeding" means any judicial, administrative or
arbitral actions, suits, proceedings (public or private), claims or governmental
proceedings.
"Lien" means any lien, pledge, hypothecation, levy, mortgage,
deed of trust, security interest, claim, lease, charge, option, right of first
refusal, easement, or other real estate declaration, covenant, condition,
restriction or servitude, transfer restriction under any shareholder or similar
agreement, encumbrance or any other restriction or limitation whatsoever.
"Material Adverse Change" means any material adverse change in
the business, properties, results of operations, prospects or condition
(financial or otherwise) of the relevant party; provided, however, that
notwithstanding any other provision of this Agreement, none of the following
shall be deemed in themselves, either alone or in combination, to constitute,
and none of the following shall be taken into account in determining whether
there has been or will be, a Material Adverse Change:(a) any failure by the
relevant party to meet internal projections or forecasts or published revenue or
earnings predictions for any period ending (or for which revenues or earnings
are released) on or after the date of this Agreement; (b) any adverse change,
effect, event, occurrence, state of facts or development to the extent
attributable to the announcement or pendency of the transaction documented by
this Agreement (including any cancellations of or delays in customer orders, any
reduction in sales, any disruption in supplier, distributor, partner or similar
relationships or any loss of employees); (c) any adverse change, effect, event,
occurrence, state of facts or development attributable to conditions affecting
the industries in which the relevant party participates, the U.S. economy as a
whole or foreign economies in any locations where the relevant party or any of
its subsidiaries has material operation or sales; (d) any adverse change,
effect, event, occurrence, state of facts or development attributable or
relating to (i) out-of-pocket fees and expenses (including legal, accounting,
and other fees and expenses) incurred in connection with the transactions
contemplated by this Agreement, or (ii) the payment of any amounts due to, or
the provision of any other benefits (including benefits relating to acceleration
of stock options) to, any officers or employees under employment contracts,
non-competition agreements, employee benefit plans, severance arrangements or
other arrangements in existence as of the date of this Agreement, (if any
adverse change, effect, event, occurrence, state of facts or development
resulting from or relating to compliance with the terms of, or the taking of any
action required by, this
Exhibit 99.2
Page 15
Agreement); (e) any adverse change, effect, event, occurrence, state of facts or
development arising from or relating to any change in accounting requirements or
principles or any change in applicable laws, rules or regulations or the
interpretation thereof; or (f) any adverse change, effect, event, occurrence,
state of facts or development arising from or relation to actions required to be
taken under applicable laws, rules, regulations, contracts or agreements.
"Order" means any order, consent, consent order, injunction,
judgment, decree, consent decree, ruling, writ, assessment or arbitration award.
"Permits" means any approvals, authorizations, registrations,
consents, licenses, permits or certificates by any Governmental Body.
"Person" means any individual, corporation, partnership, firm,
joint venture, association, joint-stock company, trust, unincorporated
organization, Governmental Body or other entity.
"Representatives" of a Person means its officers, employees,
agents, legal advisors and accountants.
"Shares" means the Common Stock to be purchased hereunder.
9.3. Expenses. Except as otherwise expressly provided herein, all
costs and expenses incurred in connection with the Agreement and
the transactions contemplated hereby shall be paid by the party
incurring such expenses whether or not the transaction is
consummated.
9.4. Further Assurances. The Sellers and the Purchaser agree to
execute and deliver, at the requesting party's expense, such other
reasonable documents or agreements as may be necessary or desirable
for the implementation of this Agreement and the consummation of
the transactions contemplated hereby or by the other Transaction
Documents.
9.5. Submission to Jurisdiction; Waiver of Jury Trial; and Consent to
Service of Process.
9.5.1. The parties hereto hereby irrevocably submit to the
exclusive jurisdiction of any federal or state court located
within the State of New York over any dispute arising out of
or relating to this Agreement or any of the transactions
contemplated hereby or by the other Transaction Documents and
each party hereby irrevocably agrees that all claims in
respect of such dispute or any suit, action or proceeding
related thereto may be heard and determined in such courts.
The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now
or hereafter have to the laying of venue of any such dispute
brought in such court or any defense of inconvenient forum for
the maintenance of such dispute. Each of the parties hereto
agrees that a judgment in any such dispute may be enforced in
other jurisdictions by suit on the judgment or in any other
manner provided by law.
Exhibit 99.2
Page 16
9.5.2. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY OF THE
OTHER TRANSACTION DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PARTIES' ACCEPTANCE OF THIS AGREEMENT.
9.5.3. Each of the parties hereto hereby consents to process being
served by any party to this Agreement in any suit, action or
proceeding, by the mailing of a copy thereof in accordance
with the provisions of Section 11.9.
9.6. Entire Agreement; Amendments and Waivers. This Agreement
(including any schedules and exhibits hereto) represents the entire
understanding and agreement between the parties hereto with respect
to the subject matter hereof and can be amended, supplemented or
changed, and any provision hereof can be waived, only by written
instrument making specific reference to this Agreement signed by
the parties hereto. No action taken pursuant to this Agreement,
including without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any
Exhibit 99.2
Page 17
representation, warranty, covenant or agreement contained herein.
The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a further or
continuing waiver of such breach or as a waiver of any other or
subsequent breach. No failure on the part of any party to exercise,
and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial
exercise of such right, power or remedy by such party preclude any
other or further exercise thereof or the exercise of any other
right, power or remedy.
9.7. Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Florida
without giving effect to the principles of conflict of laws
thereunder.
9.8. Table of Contents and Headings. The table of contents and section
headings of this Agreement are for reference purposes only and are
to be given no effect in the construction or interpretation of this
Agreement.
9.9. Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have
been duly given when (a) delivered by hand, (b) sent by facsimile
(with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested (provided that
facsimile notice shall be deemed received on the next business day
if received after 5:00 p.m. Eastern Standard Time), or (c) when
received by the addressee, if sent by a nationally recognized
overnight delivery service, in each case to the appropriate
addresses and telecopier numbers set forth below (or to such other
addresses and facsimile numbers as a party may designate by notice
to the other parties):
If to Purchaser to:
------------------
Thomas Banks Ltd.
Attn: Chester Rothrock
#4-2443 Barrio Don Bosco
San Jose, Costa Rica
If to the Company or Sellers to:
-------------------------------
The Finx Group, Inc.
Attn: Lewis S. Schiller
249 Saw Mill River Road
Elmsford, NY 10523
(914) 592-6014 (facsimile)
Exhibit 99.2
Page 18
Severability. If any term, provision, covenant or condition of this Agreement
or part thereof, or the application thereof to any Person, place or circumstance
shall be held to be invalid, unenforceable or void by a court of competent
jurisdiction, the remainder of this Agreement and such term, provision, covenant
or condition shall remain in full force and effect, and any such invalid,
unenforceable or void term, provision, covenant or condition shall be deemed,
without further action on the part of the parties hereto, modified, amended and
limited, and the court shall have the power to modify, amend, and limit such
term, provision, covenant or condition, to the extent necessary to render the
same and the remainder of this Agreement valid, enforceable and lawful.
9.10. Binding Effect, Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective
successors and permitted assigns. Nothing in this Agreement shall
create or be deemed to create any third party beneficiary rights or
any other rights of any kind in any Person or entity not a party to
this Agreement except as specifically provided herein. No
assignment of this Agreement or of any rights or obligations
hereunder may be made by the Sellers (by operation of law or
otherwise) without the prior written consent of the Purchaser and
any attempted assignment without such required consent shall be
void.
9.11. Confidential Information. All Confidential Information with
respect to any party hereto is considered secret and will be
disclosed in confidence. Each party hereto acknowledges that, it
may have access to and become acquainted with Confidential
Information of another party. Each party hereto agrees that it will
not prior to the Closing Date (or in the event of the termination
of this Agreement in accordance with its terms) and at all times
thereafter, directly or indirectly for any reason whatsoever,
disclose or use any such Confidential Information. All records,
files, drawings, documents, equipment and other tangible items,
wherever located, relating in any way to or containing Confidential
Information, which any party has prepared or shall in the future
prepare, shall be and remain the sole and exclusive property of
such party and shall be included in the Confidential Information.
Upon termination of this Agreement in accordance with its terms,
the parties shall promptly deliver any and all of the Confidential
Information and copies thereof of any other party, not previously
delivered to such party, that may be in its possession or under its
control. The foregoing restrictions shall not apply to the use,
divulgence, disclosure or grant of access to Confidential
Information to the extent, but only to the extent, (i) expressly
permitted or required pursuant to any other written agreement
between the parties, (ii) such Confidential Information has been
publicly disclosed (not due to a breach by any party of its
obligations hereunder, or by breach of any other Person, of a
fiduciary or confidential obligation to a party) or (iii) a party
is required to disclose Confidential Information by or to any court
of competent jurisdiction or any other Governmental Body; provided,
however, that the party required to disclose such Confidential
Information shall, prior to any such disclosure, immediately notify
the party which owns the Confidential Information of such
requirement and provided further, that such party shall have the
right, at its expense, to object to such disclosures and to seek
confidential
Exhibit 99.2
Page 19
treatment of any Confidential Information to be so disclosed on
such terms as it shall determine.
9.12. Public Announcement. The parties shall cooperate with respect to
any public announcement relating to the transactions contemplated
hereby or by the other Transaction Documents; and neither party
will issue any public statement announcing such transaction without
the prior consent of the others, except as such party in good faith
(based upon advice of counsel) believes is required by law and
following notice to the other party.
9.13. Counterparts. This Agreement may be executed in multiple
counterparts each of which shall be an original but all of which
together shall constitute one and the same instrument. This
Agreement may also be executed and delivered by exchange of
facsimile copies showing the signatures of the parties, and those
signatures need not be affixed to the same copy. The facsimile
copies showing the signatures of the parties will constitute
originally signed copies of the Agreement requiring no further
execution.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
Exhibit 99.2
Page 20
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above.
ATTEST: THE FINX GROUP, INC.
________________________ By: ___________________________
SIGNATURE LEWIS S. SCHILLER
CHIEF EXECUTIVE OFFICER
------------------------
PRINT NAME
.........................................................................
ATTEST BIZCHASE, Inc.
________________________ By: __________________________
SIGNATURE LEWIS S. SCHILLER
CHIEF EXECUTIVE OFFICER
------------------------
PRINT NAME
.........................................................................
ATTEST LEWIS S. SCHILLER
________________________ By: ___________________________
SIGNATURE LEWIS S. SCHILLER
------------------------
PRINT NAME
.........................................................................
ATTEST GRAZYNA B. WNUK
________________________ By: ___________________________
SIGNATURE GRAZYNA B. WNUK
------------------------
PRINT NAME
Exhibit 99.2
Page 21
.........................................................................
ATTEST CAROL SCHILLER
________________________ By: ___________________________
SIGNATURE CAROL SCHILLER
------------------------
PRINT NAME
.........................................................................
ATTEST BLAKE SCHILLER
________________________ By: ___________________________
SIGNATURE BLAKE SCHILLER
------------------------
PRINT NAME
.........................................................................
ATTEST DOUGLAS SCHILLER
________________________ By: ___________________________
SIGNATURE DOUGLAS SCHILLER
------------------------
PRINT NAME
.........................................................................
ATTEST LINDA SCHILLER IGLES
________________________ By: ___________________________
SIGNATURE LINDA SCHILLER IGLES
------------------------
PRINT NAME
Exhibit 99.2
Page 22
.........................................................................
ATTEST: THOMAS BANKS LTD.
________________________ By: ___________________________
SIGNATURE CHESTER ROTHROCK
MANAGING DIRECTOR
------------------------
PRINT NAME
Exhibit 99.2
Page 23
Exhibit 99.3
STOCK PURCHASE AGREEMENT
BY AND AMONG
THE FINX GROUP, INC.,
EACH OF THE SHAREHOLDERS OF STARNET365.COM,, INC.,
STARNET365.COM, INC.,
AND
THOMAS BANKS LTD.
Dated: As of September 30, 2002
Exhibit 99.3
Page 1
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of September 30, 2002 (the
"Agreement"), among Thomas Banks Ltd., a Cayman corporation with an office at
#4-2443 Barrio Don Bosco, San Jose, Costa Rica (the "Purchaser"),
Starnet365.com, Inc., a corporation organized under the laws of the State of
Delaware with an office at 249 Saw Mill River Road, Elmsford, New York 10523,
(the "Company"), and The Finx Group, Inc., a corporation organized under the
laws of the State of Delaware, with an office at 249 Saw Mill River Road,
Elmsford, New York 10523 and those individuals and entities whose names appear
on the signature page hereof in their capacity as holders of 98.05% of the
outstanding common stock of the Company (collectively referred to as the
"Sellers").
WITNESSETH:
--------------------
The Sellers collectively hold 98.05% the Company's shares (the
"Shares") of common stock, par value $.01 per share (the "Common Stock"), and
100% of the Company's preferred stock, of the Company, a corporation organized
under the laws of the State of Delaware;
The Purchaser desires to acquire from the Sellers, and the
Sellers collectively desire to sell to the Purchaser, for the consideration
hereinafter provided, the Shares; and
Certain terms used in this Agreement are defined in Section
9.2 of this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual
covenants and agreements hereinafter contained, the parties hereto, intending to
be legally bound, hereby agree as follows:
Exhibit 99.3
Page 2
1. Sale and Purchase of Shares; the Closing.
1.1. Sale and Purchase of Shares. Subject to the terms and conditions
of this Agreement and on the basis of the representations,
warranties, covenants and agreements herein contained, on the
Closing Date, the Sellers shall sell, assign and convey to the
Purchaser, and the Purchaser shall purchase, acquire and accept
from the Sellers, all of the Shares of such Sellers. At the
Closing, the Sellers shall deliver one or more stock certificates
representing the Shares of the Sellers duly endorsed for transfer
to the Purchaser.
1.2. The Closing. The consummation of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of
the parties to the transaction upon execution of this Agreement on
September 30, 2002 or at such other time and date as the parties
hereto mutually agree (the "Closing Date").
2. Consideration.
2.1. Consideration. The consideration for the Shares shall be as
follows:
2.1.1. One Dollar ($1).
2.1.2. The cancellation of indebtedness owed by the Company or its
subsidiary to the Sellers and the Sellers' affiliates and or
subsidiaries.
3. Representations and Warranties of the Sellers. The Sellers hereby
represent and warrant to the Purchaser, that to the best of their
knowledge:
3.1. Organization and Good Standing.
3.1.1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to own,
lease and operate its properties and to carry on its business
as it is now conducted and as it is proposed to be conducted.
3.1.2. The minute books of the Company contain accurate records of
all meetings and all other material corporate action of the
Company's board of directors (including any committees
thereof) and its stockholders since the date of the Company's
incorporation.
3.2. Authorization of Agreement. The Sellers have all requisite
capacity, power and authority to execute and deliver this Agreement
and each other agreement, document, instrument or certificate
contemplated by this Agreement or to be executed by such Sellers in
connection with the consummation of the transactions contemplated
by this Agreement (this Agreement and the other agreements,
documents, instruments or
Exhibit 99.3
Page 3
certificates delivered pursuant to this Agreement are hereinafter
referred to as the "Transaction Documents"), and to perform fully
its obligations hereunder and thereunder. This Agreement has been,
and each of the other Transaction Documents will be (when executed
and delivered by the Sellers), duly and validly authorized,
executed and delivered by the Sellers and this Agreement
constitutes, and each of the other Transaction Documents will
constitute (when executed and delivered by the Sellers), legal,
valid and binding obligations of the Sellers, enforceable against
the Sellers in accordance with their respective terms, subject, as
to enforceability, to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law
or in equity).
3.3. Subsidiaries. The Company has no subsidiaries and does not own any
other capital stock or other proprietary interest, directly or
indirectly, in any corporation, association, trust, partnership,
joint venture or other entity or have any agreement to acquire any
such capital stock or other proprietary interest except for the
following:
3.3.1. None.
3.4. No Conflicts; Consents of Third Parties. The execution and
delivery by the Sellers of this Agreement and the other Transaction
Documents, the consummation of the transactions contemplated hereby
or thereby, and the compliance by the Sellers with any of the
provisions hereof or thereof does not and will not (i) conflict
with, or result in the breach of, any provision of the certificate
of incorporation or by-laws of the Company; (ii) conflict with,
violate, result in the breach or termination of, or constitute a
default or give rise to any "takeback" right or right of
termination or acceleration or right to increase the obligations or
otherwise modify the terms thereof under any Contract, Permit or
Order to which the Company is a party or by which the Company or
the properties or assets of the Seller are bound; (iii) constitute
a violation of any Law applicable to the Company; or (iv) result in
the creation of any Lien upon the properties or assets of the
Company or the Sellers.
3.5. Capitalization.
3.5.1. The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock and 1,500 shares of
preferred stock. As of the date hereof, 17,030,000 shares of
Common Stock are issued and outstanding, 98.05% of which are
owned of record and beneficially by the Sellers and constitute
the Shares. As of the date hereof, there are 100 shares of
Company preferred stock issued and outstanding, all of which
are owned of record and beneficially by the Sellers. There is
no existing option, warrant, call, right, commitment or other
agreement of any character to which the Company is a party
requiring, and there are no securities of the Company
outstanding which upon conversion or exchange would require,
the issuance, sale or transfer of any additional shares of
capital stock or other equity securities of the Company or
other securities convertible into, exchangeable for or
Exhibit 99.3
Page 4
evidencing the right to subscribe for or purchase shares of
capital stock or other equity securities of the Company.
Neither the Company nor the Sellers is a party to any voting
trust or other voting agreement with respect to any shares of
capital stock or to any agreement relating to the issuance,
sale, redemption, transfer or other disposition of capital
stock of the Company
3.5.2. The Shares purchased by the Purchaser will, at the Closing,
constitute 98.05% all of the issued and outstanding capital
stock of the Company on a fully diluted basis.
3.6. Financial Statements. Set forth on Schedule 3.6 of the Disclosure
Schedules are (i) copies of the Company's unaudited balance sheets
as of June 30, 2002 and December 31, 2001 and the related unaudited
statements of income and of cash flows for the three and six month
periods ended June 30, 2002 and 2001, (the "Unaudited Financial
Statements"). The Unaudited Financial Statements have been prepared
on a going concern basis, which contemplates the realization of
assets and the liquidation of liabilities in the normal course of
business. However, the Company has a history of net losses and has
a working capital deficiency. The Unaudited Financial Statements do
not include any adjustments that would result should the Company be
unable to continue as a going concern.
3.7. There have not been any amendments or changes in the certificate
of incorporation or the by-laws of the Company.
3.8. The Company has caused to be done all things materially necessary
to maintain, preserve and renew its corporate existence and all
material licenses, authorizations and permits necessary to the
conduct of its business.
4. Representations and Warranties of the Purchaser. The Purchaser hereby,
jointly and severally, represent and warrant to the Sellers that:
4.1. Organization and Good Standing. The Purchaser is a corporation
duly organized, validly existing and in good standing. The
Purchaser has full corporate power and authority to own, lease and
operate their properties and to carry on their business as it is
now conducted and as it is proposed to be conducted.
4.2. Authorization of Agreement. The Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement
and each of the other Transaction Documents to be executed by the
Purchaser in connection with the consummation of the transactions
contemplated hereby and thereby, and to perform fully their
obligations hereunder and thereunder. The execution, delivery and
performance by the Purchaser of this Agreement and each of the
other Transaction Documents to be executed by the Purchaser have
been duly authorized by all necessary action on behalf of the
Purchaser. This Agreement has been, and each of the other
Transaction Documents will be (when executed and delivered by the
Purchaser), duly and validly executed and delivered by the
Exhibit 99.3
Page 5
Purchaser and (assuming the due authorization, execution and
delivery by the other parties hereto and thereto) this Agreement
constitutes, and each of the other Transaction Documents will
constitute (when executed and delivered by the Purchaser), legal,
valid and binding obligations of the Purchaser, enforceable against
the Purchaser in accordance with their respective terms, subject,
as to enforceability, to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject to general principles of
equity (regardless of whether enforcement is sought in a proceeding
at law or in equity).
4.3. No Conflicts; Consents of Third Parties. The execution and
delivery by the Purchaser of this Agreement and the other
Transaction Documents to be executed by the Purchaser, the
consummation of the transactions contemplated hereby or thereby,
and the compliance by the Purchaser with any of the provisions
hereof or thereof does not and will not (a) conflict with, or
result in the breach of, the certificate of incorporation or
by-laws of the Purchaser, (b) conflict with, violate, result in the
breach of, or constitute a default under any Contract or Order to
which the Purchaser is a party or by which the Purchaser or their
properties or assets are bound or (c) constitute a violation by the
Purchaser of any Law applicable to the Purchaser. No consent,
waiver, approval, Order, Permit or authorization of, or declaration
or filing with, or notification to, any Person or Governmental Body
is required on the part of the Purchaser in connection with the
execution and delivery of this Agreement or the other Transaction
Documents to be executed by the Purchaser or the compliance by the
Purchaser with any of the provisions hereof or thereof which has
not been made or obtained.
4.4. Litigation. There are no Legal Proceedings against the Purchaser
pending or, to the best knowledge of the Purchaser, threatened that
question the validity of this Agreement or any of the other
Transaction Documents or any action taken or to be taken by the
Purchaser in connection with the consummation of the transactions
contemplated hereby or thereby. There is no action, suit,
investigation or proceeding (or, to the knowledge of the Purchaser,
any basis therefor) pending against, or to the knowledge of the
Purchaser threatened, against or affecting the Purchaser, any of
their Subsidiaries or any of their properties before any court or
arbitrator or any governmental body, agency or official that if
adversely determined against the Purchaser, would result in a
Material Adverse Change to the Purchaser.
4.5. No Misrepresentation. No representation or warranty of the
Purchaser contained in this Agreement (including the Disclosure
Schedules hereto) or in any other Transaction Document furnished to
the Seller pursuant to the terms hereof contains or will contain
any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained
herein or therein, in light of the circumstances under which they
were made, not misleading. The Purchaser does not know of any facts
which have caused or in the future are reasonably likely to cause a
Material Adverse Change which has not been disclosed herein or in a
Disclosure Schedule hereto. The representations and warranties
contained in this Section 4.11 or elsewhere in this Agreement or in
any other Transaction Document shall not be affected
Exhibit 99.3
Page 6
or deemed waived by reason of the fact that any Seller and/or any
Representative of any Sellers knows or should have known that any
such representation or warranty is or might be inaccurate in any
respect.
5. Additional Representations, Warranties and Covenants.
5.1. Title and Investment Representations. The Sellers represents and
warrants to, and covenants and agrees with the Purchaser that, it
has good and marketable title to the Shares of the Sellers, free
and clear of all Liens of any kind or nature whatsoever and that at
the Closing, the Purchaser will obtain good and marketable title to
such Shares, free and clear as aforesaid.
5.2. Information Representations. The Sellers represents and warrants
that (i) such Sellers, and his Representatives as deemed necessary
by such Sellers (including such Sellers' professional, tax and
other advisors), have carefully reviewed the materials (the
"Materials") furnished by the Purchaser to such Sellers in
connection with the transactions contemplated by this Agreement and
(ii) such Sellers, and such Seller's Representatives, have been
granted the opportunity to ask questions of, and receive answers
from, Representatives of the Purchaser concerning the Purchaser and
to obtain any additional information that such Sellers deemed
necessary to verify the accuracy of the information contained
herein.
5.3. Advise of Changes. During the period from the date of this
Agreement until the earlier of the Closing Date, the Company will
promptly advise the Purchaser in writing of the following, to the
extent it has knowledge of the same: (a) of any event occurring
subsequent to the date of this Agreement that would render any
representation or warranty of the Sellers contained in this
Agreement, if made on or as of the date of such event or the
Closing Date, materially inaccurate, (b) of any Material Adverse
Change, and (c) of any breach by the Sellers of any covenant or
agreement contained in any Transaction Document.
5.4. Maintenance of Business. From the date hereof until the earlier of
the Closing Date and the termination of this Agreement in
accordance with its terms, the Sellers shall cause the Company to:
5.4.1. cause to be done all things necessary to maintain, preserve
and renew its (i) corporate existence and all material
licenses, authorizations and permits necessary to the conduct
of its businesses and (ii) relationships with customers,
suppliers, employees and others in substantially the same
manner as it has prior to the date hereof;
5.4.2. comply in all material respects with all applicable Laws;
and
5.4.3. maintain proper books of record and account which present
fairly in all material respects its financial condition and
results of operations and make provisions on its
Exhibit 99.3
Page 7
financial statements for all such proper reserves as in each
case are required in accordance with generally accepted
accounting principles, consistently applied.
5.5. Conduct of Business. During the period from the date of this
Agreement until the Closing Date, the Company will continue to
conduct its business and maintain its business relationships in the
ordinary and usual course and will not (except to the extent, but
only to the extent, deemed necessary by the officers and directors
of the Company in fulfilling their fiduciary duties), without the
prior written consent of the Purchaser,:
5.5.1. (i) declare, set aside or authorize the payment of, any
dividend or other distribution in respect of any shares of
capital stock of the Company or repurchase, redeem or acquire
any of the outstanding shares of any class of capital stock or
(ii) pay or otherwise distribute any other amounts or assets
to the Sellers, whether as compensation or otherwise;
5.5.2. split or combine the outstanding shares of its capital
stock of any class or enter into any recapitalization or
agreement affecting the number or rights of outstanding shares
of any class of its capital stock;
5.5.3. (i) award or pay any bonuses to employees of the Company,
(ii) enter into or modify or amend any employment, deferred
compensation, severance or similar agreement, (iii) increase
or agree to increase the compensation payable or to become
payable by it to any of the Company's directors, officers,
employees, agents or Representatives or (iv) increase or agree
to increase the coverage or benefits available under any
severance pay, termination pay, vacation pay, company awards,
salary continuation for disability, sick leave, deferred
compensation, bonus or other incentive compensation,
insurance, pension or other employee benefit plan, payment or
arrangement made to, for or with such directors, officers,
employees, agents or Representatives;
5.5.4. change accounting principles, methods or policies;
5.5.5. enter into any Contract requiring payments in excess of
$5,000, or conduct its business other than in the ordinary
course of business consistent with past practice;
5.5.6. (i) incur or repay any Indebtedness, (ii) make any loans,
advances or capital contributions to any other Person or (iii)
assume, guarantee, endorse or otherwise become liable for the
obligations of any other Person.
5.5.7. fail to maintain and keep its properties in good repair,
working order and condition, normal wear and tear excepted;
5.5.8. fail to comply with all other obligations which it incurred
pursuant to any Contract or promptly pay or discharge any
current liabilities, as such obligations become due, unless
and to the extent that the same are being contested in good
faith
Exhibit 99.3
Page 8
and by appropriate proceedings and adequate reserves (as
determined in accordance with generally accepted accounting
principles, consistently applied) have been established on its
books with respect thereto;
5.5.9. mortgage, pledge or subject to any Lien any of its assets,
or acquire any assets or sell, assign, transfer, convey, lease
or otherwise dispose of any assets of the Company (other than
the sale of inventory in the ordinary course of business
consistent with past practice);
5.5.10. discharge or satisfy any Lien, or pay any obligation or
liability (fixed or contingent), except in the ordinary course
of business consistent with past practice and which, in the
aggregate, would not be material to the Company;
5.5.11. transfer or grant any rights under any concessions, leases,
licenses, agreements or Intellectual Property used by the
Company in its business;
5.5.12. make or commit to make any capital expenditures or capital
additions or betterments;
5.5.13. institute or settle any Legal Proceeding;
5.5.14. amend its certificate of incorporation or by-laws;
5.5.15. issue, sell or transfer any shares of its capital stock of
any class or any other of its securities, or issue or create
any options, warrants, calls, rights, commitments,
subscriptions, convertible securities or other agreements of
any character requiring the Company to issue, sell or transfer
any shares of capital stock, or accelerate the vesting of any
outstanding security;
5.5.16. merge, consolidate or reorganize with, or acquire, any
entity;
5.5.17. agree to any audit assessment by any Tax authority or fail
to pay and discharge when payable all Taxes, assessments and
governmental charges imposed upon its properties or upon the
income or profits therefrom (in each case before the same
becomes delinquent and before penalties accrue thereon) and
all claims for labor, materials or supplies which if unpaid
would by law become a Lien upon any of its property;
5.5.18. change any insurance coverage, issue any certificates of
insurance or fail to continue in force with nationally
recognized insurance companies adequate insurance covering
risks of such types and in such amounts as are customary for
Persons engaged in similar lines of business;
5.5.19. enter into any transaction with, or become party to any
Contract with, any officer, director, or Affiliate (or any
relative of any of them) of the Company; or
Exhibit 99.3
Page 9
5.5.20. agree to do, or enter into negotiations with respect to,
any of the things described in the preceding clauses in this
Section 5.5.
5.6. Regulatory Approvals. The Sellers will, and will cause the Company
to, promptly execute and file, or join in the execution and filing,
of any application or other document that may be necessary in order
to obtain the authorization, approval or consent of any
Governmental Body which may be reasonably required, or which the
Purchaser may reasonably request in connection with the
consummation of the transactions contemplated by this Agreement.
The Sellers will use its, and will cause the Company to use its,
best efforts to promptly obtain all such authorizations, approvals
and consents.
5.7. Necessary Consents. During the period from the date of this
Agreement until the Closing Date, the Sellers will use its, and
will cause the Company to use its, best efforts to obtain such
written consents and take such other actions as may be necessary or
appropriate to facilitate the consummation of the transactions
contemplated hereby and by the other Transaction Documents and to
allow the Purchaser to carry on the Company's business after the
Closing Date.
5.8. Access to Information. During the period from the date of this
Agreement until the earlier of the Closing Date or the termination
of this Agreement in accordance with its terms, the Sellers will,
and shall cause the Company to, (i) allow the Purchaser and its
Representatives reasonable access to the files, books, records,
personnel and offices of the Company, including, without
limitation, any and all information relating to the Company's
Taxes, commitments, Contracts, and real, personal and intangible
property and financial condition, (ii) furnish promptly to the
Purchaser all information concerning the Company's business,
properties and personnel as the Purchaser may reasonably request,
and (iii) make available to the Purchaser the appropriate
individuals (including attorneys, accountants and other
professionals) for discussion of the Company's business, properties
and personnel as the Purchaser may reasonably request. The Sellers
will cause the Company's accountants to cooperate with the
Purchaser and its Representatives in making available to the
Purchaser all financial information reasonably requested,
including, without limitation, the right to examine all working
papers pertaining to all Tax returns and financial statements
prepared, reviewed or audited by such accountants.
5.9. Satisfaction of Conditions Precedent. During the period from the
date of this Agreement until the Closing Date, the Sellers will use
its, and will cause the Company to use its, best efforts to satisfy
or cause to be satisfied all the conditions precedent that are set
forth in Section 7.
5.10. Directors and Officers of the Company. As of the Closing Date, all
officer and directors of the Company shall resign and shall be
replaced by the Purchaser's nominees.
Exhibit 99.3
Page 10
6. Covenants of the Purchaser.
6.1. Advise of Changes. During the period from the date of this
Agreement until the Closing Date, the Purchaser will promptly
advise the Sellers in writing (a) of any event occurring subsequent
to the date of this Agreement that would render any representation
or warranty of the Purchaser, as the case may be, contained in this
Agreement, if made on or as of the date of such event or the
Closing Date, materially inaccurate in any material respect, and
(b) of any breach by the Purchaser of any covenant or agreement
contained in this Agreement.
6.2. Regulatory Approvals. The Purchaser will promptly execute and
file, or join in the execution and filing, of any application or
other document that may be necessary in order to obtain the
authorization, approval or consent of any Governmental Body, or
which the Sellers may reasonably request in connection with the
consummation of the transactions contemplated by this Agreement.
The Purchaser will use their best efforts to promptly obtain all
such authorizations, approvals and consents.
6.3. Necessary Consents. During the term of this Agreement, the
Purchaser will use their best efforts to obtain such written
consents and take such other actions as may be necessary or
appropriate to facilitate the consummation of the transactions
contemplated hereby and by the other Transaction Documents.
6.4. Satisfaction of Conditions Precedent. During the term of this
Agreement, the Purchaser will use their best efforts to satisfy or
cause to be satisfied all the conditions precedent that are set
forth in Section 7.
7. Conditions.
7.1. Conditions Precedent to Each Party's Obligations. The respective
obligations of each party hereunder are subject to the fulfillment
or satisfaction on or before the Closing Date of each of the
following conditions (any one or more of which may be waived in
writing by all of the parties to this Agreement):
7.1.1. Compliance with Law. There shall be no Law enacted,
entered, enforced or deemed applicable to the transactions
contemplated hereby or by the other Transaction Documents
which would prohibit or render illegal the transactions
contemplated hereby or thereby.
7.1.2. No Legal Proceedings or Orders. There shall not have been
instituted, pending or threatened any Legal Proceeding by or
before any Governmental Body, nor shall there be in effect any
Order issued by any Governmental Body, or threat of any Order,
that (i) prevents or seeks to prevent, or (ii) questions the
validity of this Agreement or the other Transaction Documents
or any action taken or to be taken in connection with the
consummation of the transactions contemplated hereby or
thereby.
Exhibit 99.3
Page 11
7.2. Conditions Precedent to Obligations of the Sellers. The
obligations of each of the Sellers hereunder are subject to the
fulfillment or satisfaction on or before the Closing Date of each
of the following conditions (any one or more of which may be waived
in writing by the Sellers):
7.2.1. Accuracy of Representations and Warranties. The
representations and warranties of the Purchaser set forth in
Section 4 shall be true and accurate in all material respects
on and as of the Closing Date with the same force and effect
as if they had been made at the Closing, and the Sellers shall
receive a certificate to such effect signed by an officer of
the Purchaser.
7.2.2. Covenants. The Purchaser shall have performed and complied
in all material respects with all of its covenants required to
be performed by them under this Agreement on or before the
Closing Date.
7.3. Conditions Precedent To Obligations of the Purchaser.
7.3.1. The obligations of the Purchaser hereunder are subject to
the fulfillment or satisfaction on or before the Closing Date
of each of the following conditions (any one or more of which
may be waived in writing by the Purchaser):
7.3.2. Accuracy of Representations and Warranties. The
representations and warranties of each of the Sellers set
forth in Section 3 shall be true and accurate in all material
respects on and as of the Closing Date with the same force and
effect as if they had been made at the Closing, and the
Purchaser shall receive a certificate to such effect signed by
each of the Sellers.
7.3.3. Covenants. Each of the Purchasers shall have performed and
complied in all material respects with all of the covenants
required to be performed by such Sellers under this Agreement
on or before the Closing Date.
7.3.4. Documents. The Purchaser shall have received all written
consents, assignments, waivers, authorizations or other
certificates reasonably requested of the Company in writing to
provide for the continuation in full force and effect of any
and all material Contracts of the Company and for each of the
Sellers to consummate the transactions contemplated hereby and
by the other Transaction Documents.
7.3.5. Government Consents. There shall have been obtained on or
before the Closing Date such material Permits and there shall
have been taken such other action, as may be required to
consummate the transactions contemplated hereby and by the
other Transaction Documents by any Government Body having
jurisdiction over the parties and the actions herein proposed
to be taken, including but not limited to requirements under
applicable federal and state securities laws.
Exhibit 99.3
Page 12
7.3.6. Satisfactory Completion of Due Diligence. The Purchaser
shall have (i) received all due diligence materials requested
by the Purchaser from the Company and the Sellers and shall be
satisfied in their sole discretion with the results of their
review and analysis of such materials, and (ii) conducted
interviews with such members of the Company's management or
such other personnel as the Purchaser shall have requested and
shall be satisfied in their sole discretion with the results
of such interviews.
8. Further Agreements of the Parties.
8.1. Indemnity. The Sellers and, until the Closing, the Company, agrees
to indemnify, defend and hold harmless the Purchaser (and each
officer, director, shareholder, affiliate, agent and permitted
assign thereof) from and against any and all losses, liabilities,
damages, deficiencies, costs or expenses (including interest,
penalties, and attorneys' fees, disbursements and related charges)
(collectively, "Losses") based upon, arising out of or otherwise in
respect of any inaccuracy in or breach of any representations,
warranties, covenants or agreements of the Company or of the
Sellers contained in this Agreement or the other Transaction
Documents.
8.2. The Purchaser agrees to indemnify, defend and hold harmless the
Company (and each officer, director, shareholder, affiliate, agent
and permitted assign thereof)and the Sellers from and against any
and all Losses based upon, arising out of or otherwise in respect
of any inaccuracy in or breach of any representations, warranties,
covenants or agreements of the Purchaser contained in this
Agreement or the other Transaction Documents.
8.3. The indemnification provided for in Section 10 shall be an
exclusive remedy for the parties, and the other individuals and
entities entitled to indemnification thereby.
9. Non Selling Shareholders
9.1. Certain shareholders of the Company obtained their ownership of
common stock shares of the Company's pursuant to a private
placement offering certain individuals purchased an aggregate of
338,500 shares of common stock of the Company for an aggregate of
$169,250 (the "Non Selling Shareholders"). In the event the Non
Selling Shareholders, either individually or collectively, make a
claim against the Company for the extent of their investment in the
Company, the Sellers agree to indemnify the Purchaser for up to
$169,250 in the event such claims are made by the Non Selling
Shareholders.
10. Miscellaneous.
10.1. Survival of Representations and Warranties. The representations
and warranties of the Sellers contained in this Agreement shall
survive the Closing for the benefit of the Purchaser until one year
following the Closing Date. The representations and warranties of
the Purchaser shall survive the Closing for the benefit of the
Sellers until one year following the Closing Date.
Exhibit 99.3
Page 13
10.2. Certain Definitions.
"Closing" shall have the meaning set forth in Section 1
hereof.
"Closing Date" shall have the meaning set forth in Section 1
hereof.
"Common Stock" means shares of the Company's Common Stock, par
value $.01 per share.
"Confidential Information" shall mean confidential records and
information, including, but not limited to, development, marketing, purchasing,
organizational, strategic, financial, managerial, administrative, manufacturing,
production, distribution and sales information, distribution methods, data,
specifications and processes presently owned or at any time hereafter developed
by a Person or its agents or consultants or used presently or at any time
hereafter in the course of the business of such Person, that are not otherwise
part of the public domain.
"Contract" means any contract, agreement, indenture, note,
bond, loan, instrument, lease, conditional sale contract, mortgage, license,
franchise, insurance policy. commitment or other arrangement or agreement,
whether written or oral.
"Environmental Claim" means any accusation, allegation, notice
of violation, action, claim, Lien, demand, abatement or other Order or direction
(conditional or otherwise) by any Governmental Body or any Person for personal
injury (including sickness, disease or death), tangible or intangible property
damage, damage to the environment, nuisance, pollution, contamination or other
adverse effects on the environment, or for fines, penalties or restrictions
resulting from or based upon the violation, or alleged violation, of any
Environmental Laws, Orders or Permits of or from any Governmental Body relating
to environmental matters connected with the Facilities.
"Environmental Law" means any Law concerning the environment,
or activities that might threaten or result in damage to the environment or
human health, or any Law that is concerned in whole or in part with the
environment and with protecting or improving the quality of the environment and
human and employee health and safety.
"Environmental Matters" means any matter arising out of or
relating to human and employee health and safety or the environment which could
give rise to liability or require the expenditure of money to address.
"Facilities" means real property, leased or operated by the
Company.
"Governmental Body" means any governmental or regulatory body,
whether federal, state, local or foreign, or any agency, instrumentality or
authority thereof, or any court or arbitrator (public or private).
Exhibit 99.3
Page 14
"Indebtedness" means at a particular time, without
duplication, (i) any indebtedness for borrowed money or issued in substitution
for or exchange of indebtedness for borrowed money, including any bank overdraft
or other similar extension of credit, (ii) any indebtedness evidenced by any
note, bond, debenture or other debt security, (iii) any indebtedness for the
deferred purchase price of property or services with respect to which a Person
is liable, contingently or otherwise, as obligor or otherwise (other than trade
payables and other current liabilities incurred in the ordinary course of
business which are not more than 30 days past due), (iv) any commitment by which
a Person assures a creditor against loss (including, without limitation,
contingent reimbursement obligations with respect to letters of credit), (v) any
indebtedness guaranteed in any manner by a Person (including, without
limitation, guarantees in the form of an agreement to repurchase or reimburse),
(vi) any obligations under capitalized leases with respect to which a Person is
liable, contingently or otherwise, as obligor, guarantor or otherwise, or with
respect to which obligations a Person assures a creditor against loss, (vii) any
indebtedness secured by a Lien on a Person's assets and (viii) any unsatisfied
obligation for "withdrawal liability" to a multiemployer plan" as such terms are
defined under ERISA.
"Law" means any federal, state, local or foreign law
(including common law), statute, code, ordinance, rule, regulation or other
requirement or guideline.
"Legal Proceeding" means any judicial, administrative or
arbitral actions, suits, proceedings (public or private), claims or governmental
proceedings.
"Lien" means any lien, pledge, hypothecation, levy, mortgage,
deed of trust, security interest, claim, lease, charge, option, right of first
refusal, easement, or other real estate declaration, covenant, condition,
restriction or servitude, transfer restriction under any shareholder or similar
agreement, encumbrance or any other restriction or limitation whatsoever.
"Material Adverse Change" means any material adverse change in
the business, properties, results of operations, prospects or condition
(financial or otherwise) of the relevant party; provided, however, that
notwithstanding any other provision of this Agreement, none of the following
shall be deemed in themselves, either alone or in combination, to constitute,
and none of the following shall be taken into account in determining whether
there has been or will be, a Material Adverse Change:(a) any failure by the
relevant party to meet internal projections or forecasts or published revenue or
earnings predictions for any period ending (or for which revenues or earnings
are released) on or after the date of this Agreement; (b) any adverse change,
effect, event, occurrence, state of facts or development to the extent
attributable to the announcement or pendency of the transaction documented by
this Agreement (including any cancellations of or delays in customer orders, any
reduction in sales, any disruption in supplier, distributor, partner or similar
relationships or any loss of employees); (c) any adverse change, effect, event,
occurrence, state of facts or development attributable to conditions affecting
the industries in which the relevant party participates, the U.S. economy as a
whole or foreign economies in any locations where the relevant party or any of
its subsidiaries has material operation or sales; (d) any adverse change,
effect, event, occurrence, state of facts or development attributable or
relating to (i) out-of-pocket fees and expenses (including legal,
Exhibit 99.3
Page 15
accounting, and other fees and expenses) incurred in connection with the
transactions contemplated by this Agreement, or (ii) the payment of any amounts
due to, or the provision of any other benefits (including benefits relating to
acceleration of stock options) to, any officers or employees under employment
contracts, non-competition agreements, employee benefit plans, severance
arrangements or other arrangements in existence as of the date of this
Agreement, (if any adverse change, effect, event, occurrence, state of facts or
development resulting from or relating to compliance with the terms of, or the
taking of any action required by, this Agreement); (e) any adverse change,
effect, event, occurrence, state of facts or development arising from or
relating to any change in accounting requirements or principles or any change in
applicable laws, rules or regulations or the interpretation thereof; or (f) any
adverse change, effect, event, occurrence, state of facts or development arising
from or relation to actions required to be taken under applicable laws, rules,
regulations, contracts or agreements.
"Order" means any order, consent, consent order, injunction,
judgment, decree, consent decree, ruling, writ, assessment or arbitration award.
"Permits" means any approvals, authorizations, registrations,
consents, licenses, permits or certificates by any Governmental Body.
"Person" means any individual, corporation, partnership, firm,
joint venture, association, joint-stock company, trust, unincorporated
organization, Governmental Body or other entity.
"Representatives" of a Person means its officers, employees,
agents, legal advisors and accountants.
"Shares" means the Common Stock to be purchased hereunder.
10.3. Expenses. Except as otherwise expressly provided herein, all
costs and expenses incurred in connection with the Agreement and
the transactions contemplated hereby shall be paid by the party
incurring such expenses whether or not the transaction is
consummated.
10.4. Further Assurances. The Sellers and the Purchaser agree to
execute and deliver, at the requesting party's expense, such other
reasonable documents or agreements as may be necessary or desirable
for the implementation of this Agreement and the consummation of
the transactions contemplated hereby or by the other Transaction
Documents.
10.5. Submission to Jurisdiction; Waiver of Jury Trial; and Consent to
Service of Process.
10.5.1. The parties hereto hereby irrevocably submit to the
exclusive jurisdiction of any federal or state court located
within the State of New York over any dispute arising out of
or relating to this Agreement or any of the transactions
contemplated hereby
Exhibit 99.3
Page 16
or by the other Transaction Documents and each party hereby
irrevocably agrees that all claims in respect of such dispute
or any suit, action or proceeding related thereto may be heard
and determined in such courts. The parties hereby irrevocably
waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying
of venue of any such dispute brought in such court or any
defense of inconvenient forum for the maintenance of such
dispute. Each of the parties hereto agrees that a judgment in
any such dispute may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
10.5.2. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY OF THE
OTHER TRANSACTION DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PARTIES' ACCEPTANCE OF THIS AGREEMENT.
10.5.3. Each of the parties hereto hereby consents to process being
served by any party to this Agreement in any suit, action or
proceeding, by the mailing of a copy thereof in accordance
with the provisions of Section 11.9.
10.6. Entire Agreement; Amendments and Waivers. This Agreement
(including any schedules and exhibits hereto) represents the entire
understanding and agreement between the parties hereto with respect
to the subject matter hereof and can be amended, supplemented or
changed, and any provision hereof can be waived, only by written
instrument making specific reference to this Agreement signed by
the parties hereto. No action taken pursuant to this Agreement,
including without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representation, warranty,
covenant or agreement contained herein. The waiver by any party
hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such
breach or as a waiver of any other or subsequent breach. No failure
on the part of any party to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right,
power or remedy by such party preclude any other or further
exercise thereof or the exercise of any other right, power or
remedy.
10.7. Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Florida
without giving effect to the principles of conflict of laws
thereunder.
Exhibit 99.3
Page 17
10.8. Table of Contents and Headings. The table of contents and section
headings of this Agreement are for reference purposes only and are
to be given no effect in the construction or interpretation of this
Agreement.
10.9. Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have
been duly given when (a) delivered by hand, (b) sent by facsimile
(with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested (provided that
facsimile notice shall be deemed received on the next business day
if received after 5:00 p.m. Eastern Standard Time), or (c) when
received by the addressee, if sent by a nationally recognized
overnight delivery service, in each case to the appropriate
addresses and telecopier numbers set forth below (or to such other
addresses and facsimile numbers as a party may designate by notice
to the other parties):
Exhibit 99.3
Page 18
If to Purchaser to:
------------------
Thomas Banks, Ltd.
Attn: Chester Rothrock
#4-2443 Barrio Don Bosco
San Jose, Costa Rica
If to the Company or Sellers to:
-------------------------------
The Finx Group, Inc.
Attn: Lewis S. Schiller
249 Saw Mill River Road
Elmsford, NY 10523
(914) 592-6014 (facsimile)
10.10. Severability. If any term, provision, covenant or condition of
this Agreement or part thereof, or the application thereof to any
Person, place or circumstance shall be held to be invalid,
unenforceable or void by a court of competent jurisdiction, the
remainder of this Agreement and such term, provision, covenant or
condition shall remain in full force and effect, and any such
invalid, unenforceable or void term, provision, covenant or
condition shall be deemed, without further action on the part of
the parties hereto, modified, amended and limited, and the court
shall have the power to modify, amend, and limit such term,
provision, covenant or condition, to the extent necessary to render
the same and the remainder of this Agreement valid, enforceable and
lawful.
10.11. Binding Effect, Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective
successors and permitted assigns. Nothing in this Agreement shall
create or be deemed to create any third party beneficiary rights or
any other rights of any kind in any Person or entity not a party to
this Agreement except as specifically provided herein. No
assignment of this Agreement or of any rights or obligations
hereunder may be made by the Sellers (by operation of law or
otherwise) without the prior written consent of the Purchaser and
any attempted assignment without such required consent shall be
void.
10.12. Confidential Information. All Confidential Information with
respect to any party hereto is considered secret and will be
disclosed in confidence. Each party hereto acknowledges that, it
may have access to and become acquainted with Confidential
Information of another party. Each party hereto agrees that it will
not prior to the Closing Date (or in the event of the termination
of this Agreement in accordance with its terms) and at all times
thereafter, directly or indirectly for any reason whatsoever,
disclose or use any such Confidential Information. All records,
files, drawings, documents, equipment and other tangible items,
wherever located, relating in any way to or containing Confidential
Information, which any party has prepared or shall in the future
prepare, shall be and remain the sole and exclusive property of
such party and shall be included in the Confidential Information.
Upon termination of this Agreement
Exhibit 99.3
Page 19
in accordance with its terms, the parties shall promptly deliver
any and all of the Confidential Information and copies thereof of
any other party, not previously delivered to such party, that may
be in its possession or under its control. The foregoing
restrictions shall not apply to the use, divulgence, disclosure or
grant of access to Confidential Information to the extent, but only
to the extent, (i) expressly permitted or required pursuant to any
other written agreement between the parties, (ii) such Confidential
Information has been publicly disclosed (not due to a breach by any
party of its obligations hereunder, or by breach of any other
Person, of a fiduciary or confidential obligation to a party) or
(iii) a party is required to disclose Confidential Information by
or to any court of competent jurisdiction or any other Governmental
Body; provided, however, that the party required to disclose such
Confidential Information shall, prior to any such disclosure,
immediately notify the party which owns the Confidential
Information of such requirement and provided further, that such
party shall have the right, at its expense, to object to such
disclosures and to seek confidential treatment of any Confidential
Information to be so disclosed on such terms as it shall determine.
10.13. Public Announcement. The parties shall cooperate with respect to
any public announcement relating to the transactions contemplated
hereby or by the other Transaction Documents; and neither party
will issue any public statement announcing such transaction without
the prior consent of the others, except as such party in good faith
(based upon advice of counsel) believes is required by law and
following notice to the other party.
10.14. Counterparts. This Agreement may be executed in multiple
counterparts each of which shall be an original but all of which
together shall constitute one and the same instrument. This
Agreement may also be executed and delivered by exchange of
facsimile copies showing the signatures of the parties, and those
signatures need not be affixed to the same copy. The facsimile
copies showing the signatures of the parties will constitute
originally signed copies of the Agreement requiring no further
execution.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
Exhibit 99.3
Page 20
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above.
ATTEST: THE FINX GROUP, INC.
________________________ By: ___________________________
SIGNATURE LEWIS S. SCHILLER
CHIEF EXECUTIVE OFFICER
------------------------
PRINT NAME
.........................................................................
ATTEST STARNET365.COM, INC.
________________________ By: ___________________________
SIGNATURE LEWIS S. SCHILLER
CHIEF EXECUTIVE OFFICER
------------------------
PRINT NAME
.........................................................................
ATTEST LEWIS S. SCHILLER
________________________ By: ___________________________
SIGNATURE LEWIS S. SCHILLER
------------------------
PRINT NAME
.........................................................................
ATTEST GRAZYNA B. WNUK
________________________ By: ___________________________
SIGNATURE GRAZYNA B. WNUK
------------------------
PRINT NAME
Exhibit 99.3
Page 21
.........................................................................
ATTEST CAROL SCHILLER
________________________ By: ___________________________
SIGNATURE CAROL SCHILLER
------------------------
PRINT NAME
.........................................................................
ATTEST BLAKE SCHILLER
________________________ By: ___________________________
SIGNATURE BLAKE SCHILLER
------------------------
PRINT NAME
.........................................................................
ATTEST DOUGLAS SCHILLER
________________________ By: ___________________________
SIGNATURE DOUGLAS SCHILLER
------------------------
PRINT NAME
.........................................................................
ATTEST LINDA SCHILLER IGLES
________________________ By: ___________________________
SIGNATURE LINDA SCHILLER IGLES
------------------------
PRINT NAME
Exhibit 99.3
Page 22
..........................................................
ATTEST: THOMAS BANKS LTD.
________________________ By: ___________________________
SIGNATURE CHESTER ROTHROCK
MANAGING DIRECTOR
------------------------
PRINT NAME
Exhibit 99.3
Page 23
Exhibit 99.4
STOCK PURCHASE AGREEMENT
BY AND AMONG
THE FINX GROUP, INC.,
EACH OF THE SHAREHOLDERS OF SHOPCLUE.COM, INC.,
SHOPCLUE.COM, INC.,
AND
THOMAS BANKS LTD.
Dated: As of September 30, 2002
Exhibit 99.4
Page 1
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of September 30, 2002 (the
"Agreement"), among Thomas Banks Ltd., a Cayman corporation with an office at
#4-2443 Barrio Don Bosco, San Jose, Costa Rica (the "Purchaser"), Shopclue.com,
Inc., a corporation organized under the laws of the State of Delaware with an
office at 249 Saw Mill River Road, Elmsford, New York 10523, (the "Company"),
and The Finx Group, Inc., a corporation organized under the laws of the State of
Delaware, with an office at 249 Saw Mill River Road, Elmsford, New York 10523
and those individuals and entities whose names appear on the signature page
hereof in their capacity as holders of 100% of the outstanding common stock of
the Company (collectively referred to as the "Sellers").
WITNESSETH:
--------------------
The Sellers collectively hold 100% the Company's shares (the
"Shares") of common stock, par value $.01 per share (the "Common Stock"), and
100% of the Company's preferred stock, of the Company, a corporation organized
under the laws of the State of Delaware;
The Purchaser desires to acquire from the Sellers, and the
Sellers collectively desire to sell to the Purchaser, for the consideration
hereinafter provided, the Shares; and
Certain terms used in this Agreement are defined in Section
9.2 of this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual
covenants and agreements hereinafter contained, the parties hereto, intending to
be legally bound, hereby agree as follows:
Exhibit 99.4
Page 2
1. Sale and Purchase of Shares; the Closing.
1.1. Sale and Purchase of Shares . Subject to the terms and conditions
of this Agreement and on the basis of the representations,
warranties, covenants and agreements herein contained, on the
Closing Date, the Sellers shall sell, assign and convey to the
Purchaser, and the Purchaser shall purchase, acquire and accept
from the Sellers, all of the Shares of such Sellers. At the
Closing, the Sellers shall deliver one or more stock certificates
representing the Shares of the Sellers duly endorsed for transfer
to the Purchaser.
1.2. The Closing. The consummation of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of
the parties to the transaction upon execution of this Agreement on
September 30, 2002 or at such other time and date as the parties
hereto mutually agree (the "Closing Date").
2. Consideration.
2.1. Consideration. The consideration for the Shares shall be as
follows:
2.1.1. One Dollar ($1).
2.1.2. The cancellation of indebtedness owed by the Company or its
subsidiary to the Sellers and the Sellers' affiliates and or
subsidiaries.
3. Representations and Warranties of the Sellers. The Sellers hereby
represent and warrant to the Purchaser, that to the best of their
knowledge:
3.1. Organization and Good Standing.
3.1.1. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to own,
lease and operate its properties and to carry on its business
as it is now conducted and as it is proposed to be conducted.
3.1.2. The minute books of the Company contain accurate records of
all meetings and all other material corporate action of the
Company's board of directors (including any committees
thereof) and its stockholders since the date of the Company's
incorporation.
3.2. Authorization of Agreement. The Sellers have all requisite
capacity, power and authority to execute and deliver this Agreement
and each other agreement, document, instrument or certificate
contemplated by this Agreement or to be executed by such Sellers in
connection with the consummation of the
Exhibit 99.4
Page 3
transactions contemplated by this Agreement (this Agreement and the
other agreements, documents, instruments or certificates delivered
pursuant to this Agreement are hereinafter referred to as the
"Transaction Documents"), and to perform fully its obligations
hereunder and thereunder. This Agreement has been, and each of the
other Transaction Documents will be (when executed and delivered by
the Sellers), duly and validly authorized, executed and delivered
by the Sellers and this Agreement constitutes, and each of the
other Transaction Documents will constitute (when executed and
delivered by the Sellers), legal, valid and binding obligations of
the Sellers, enforceable against the Sellers in accordance with
their respective terms, subject, as to enforceability, to
applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
to general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity).
3.3. Subsidiaries. The Company has no subsidiaries and does not own any
other capital stock or other proprietary interest, directly or
indirectly, in any corporation, association, trust, partnership,
joint venture or other entity or have any agreement to acquire any
such capital stock or other proprietary interest except for the
following:
3.3.1. None.
3.4. No Conflicts; Consents of Third Parties. The execution and
delivery by the Sellers of this Agreement and the other Transaction
Documents, the consummation of the transactions contemplated hereby
or thereby, and the compliance by the Sellers with any of the
provisions hereof or thereof does not and will not (i) conflict
with, or result in the breach of, any provision of the certificate
of incorporation or by-laws of the Company; (ii) conflict with,
violate, result in the breach or termination of, or constitute a
default or give rise to any "takeback" right or right of
termination or acceleration or right to increase the obligations or
otherwise modify the terms thereof under any Contract, Permit or
Order to which the Company is a party or by which the Company or
the properties or assets of the Seller are bound; (iii) constitute
a violation of any Law applicable to the Company; or (iv) result in
the creation of any Lien upon the properties or assets of the
Company or the Sellers.
3.5. Capitalization.
3.5.1. The authorized capital stock of the Company consists of
1,000 shares of Common Stock and 1,500 shares of preferred
stock. As of the date hereof, 1,000 shares of Common Stock are
issued and outstanding, all of which are owned of record and
beneficially by the Sellers and constitute the Shares. As of
the date hereof, there are 100 shares of Company preferred
stock issued and outstanding, all of which are owned of record
and beneficially by the Sellers. There is no existing option,
warrant, call, right, commitment or
Exhibit 99.4
Page 4
other agreement of any character to which the Company is a
party requiring, and there are no securities of the Company
outstanding which upon conversion or exchange would require,
the issuance, sale or transfer of any additional shares of
capital stock or other equity securities of the Company or
other securities convertible into, exchangeable for or
evidencing the right to subscribe for or purchase shares of
capital stock or other equity securities of the Company.
Neither the Company nor the Sellers is a party to any voting
trust or other voting agreement with respect to any shares of
capital stock or to any agreement relating to the issuance,
sale, redemption, transfer or other disposition of capital
stock of the Company
3.5.2. The Shares purchased by the Purchaser will, at the Closing,
constitute 100% all of the issued and outstanding capital
stock of the Company on a fully diluted basis.
3.6. Financial Statements. Set forth on Schedule 3.6 of the Disclosure
Schedules are (i) copies of the Company's unaudited balance sheets
as of June 30, 2002 and December 31, 2001 and the related unaudited
statements of income and of cash flows for the three and six month
periods ended June 30, 2002 and 2001, (the "Unaudited Financial
Statements"). The Unaudited Financial Statements have been prepared
on a going concern basis, which contemplates the realization of
assets and the liquidation of liabilities in the normal course of
business. However, the Company has a history of net losses and has
a working capital deficiency. The Unaudited Financial Statements do
not include any adjustments that would result should the Company be
unable to continue as a going concern.
3.7. There have not been any amendments or changes in the certificate
of incorporation or the by-laws of the Company.
3.8. The Company has caused to be done all things materially necessary
to maintain, preserve and renew its corporate existence and all
material licenses, authorizations and permits necessary to the
conduct of its business.
4. Representations and Warranties of the Purchaser. The Purchaser hereby,
jointly and severally, represent and warrant to the Sellers that:
4.1. Organization and Good Standing. The Purchaser is a corporation
duly organized, validly existing and in good standing. The
Purchaser has full corporate power and authority to own, lease and
operate their properties and to carry on their business as it is
now conducted and as it is proposed to be conducted.
4.2. Authorization of Agreement. The Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement
and each of the other
Exhibit 99.4
Page 5
Transaction Documents to be executed by the Purchaser in connection
with the consummation of the transactions contemplated hereby and
thereby, and to perform fully their obligations hereunder and
thereunder. The execution, delivery and performance by the
Purchaser of this Agreement and each of the other Transaction
Documents to be executed by the Purchaser have been duly authorized
by all necessary action on behalf of the Purchaser. This Agreement
has been, and each of the other Transaction Documents will be (when
executed and delivered by the Purchaser), duly and validly executed
and delivered by the Purchaser and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto)
this Agreement constitutes, and each of the other Transaction
Documents will constitute (when executed and delivered by the
Purchaser), legal, valid and binding obligations of the Purchaser,
enforceable against the Purchaser in accordance with their
respective terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject to
general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity).
4.3. No Conflicts; Consents of Third Parties. The execution and
delivery by the Purchaser of this Agreement and the other
Transaction Documents to be executed by the Purchaser, the
consummation of the transactions contemplated hereby or thereby,
and the compliance by the Purchaser with any of the provisions
hereof or thereof does not and will not (a) conflict with, or
result in the breach of, the certificate of incorporation or
by-laws of the Purchaser, (b) conflict with, violate, result in the
breach of, or constitute a default under any Contract or Order to
which the Purchaser is a party or by which the Purchaser or their
properties or assets are bound or (c) constitute a violation by the
Purchaser of any Law applicable to the Purchaser. No consent,
waiver, approval, Order, Permit or authorization of, or declaration
or filing with, or notification to, any Person or Governmental Body
is required on the part of the Purchaser in connection with the
execution and delivery of this Agreement or the other Transaction
Documents to be executed by the Purchaser or the compliance by the
Purchaser with any of the provisions hereof or thereof which has
not been made or obtained.
4.4. Litigation. There are no Legal Proceedings against the Purchaser
pending or, to the best knowledge of the Purchaser, threatened that
question the validity of this Agreement or any of the other
Transaction Documents or any action taken or to be taken by the
Purchaser in connection with the consummation of the transactions
contemplated hereby or thereby. There is no action, suit,
investigation or proceeding (or, to the knowledge of the Purchaser,
any basis therefor) pending against, or to the knowledge of the
Purchaser threatened, against or affecting the Purchaser, any of
their Subsidiaries or any of their properties before any court or
arbitrator or any governmental body, agency or official that if
adversely determined against the Purchaser, would result in a
Material Adverse Change to the Purchaser.
Exhibit 99.4
Page 6
4.5. No Misrepresentation. No representation or warranty of the
Purchaser contained in this Agreement (including the Disclosure
Schedules hereto) or in any other Transaction Document furnished to
the Seller pursuant to the terms hereof contains or will contain
any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained
herein or therein, in light of the circumstances under which they
were made, not misleading. The Purchaser does not know of any facts
which have caused or in the future are reasonably likely to cause a
Material Adverse Change which has not been disclosed herein or in a
Disclosure Schedule hereto. The representations and warranties
contained in this Section 4.11 or elsewhere in this Agreement or in
any other Transaction Document shall not be affected or deemed
waived by reason of the fact that any Seller and/or any
Representative of any Sellers knows or should have known that any
such representation or warranty is or might be inaccurate in any
respect.
5. Additional Representations, Warranties and Covenants.
5.1. Title and Investment Representations. The Sellers represents and
warrants to, and covenants and agrees with the Purchaser that, it
has good and marketable title to the Shares of the Sellers, free
and clear of all Liens of any kind or nature whatsoever and that at
the Closing, the Purchaser will obtain good and marketable title to
such Shares, free and clear as aforesaid.
5.2. Information Representations. The Sellers represents and warrants
that (i) such Sellers, and his Representatives as deemed necessary
by such Sellers (including such Sellers' professional, tax and
other advisors), have carefully reviewed the materials (the
"Materials") furnished by the Purchaser to such Sellers in
connection with the transactions contemplated by this Agreement and
(ii) such Sellers, and such Seller's Representatives, have been
granted the opportunity to ask questions of, and receive answers
from, Representatives of the Purchaser concerning the Purchaser and
to obtain any additional information that such Sellers deemed
necessary to verify the accuracy of the information contained
herein.
5.3. Advise of Changes. During the period from the date of this
Agreement until the earlier of the Closing Date, the Company will
promptly advise the Purchaser in writing of the following, to the
extent it has knowledge of the same: (a) of any event occurring
subsequent to the date of this Agreement that would render any
representation or warranty of the Sellers contained in this
Agreement, if made on or as of the date of such event or the
Closing Date, materially inaccurate, (b) of any Material Adverse
Change, and (c) of any breach by the Sellers of any covenant or
agreement contained in any Transaction Document.
Exhibit 99.4
Page 7
5.4. Maintenance of Business. From the date hereof until the earlier of
the Closing Date and the termination of this Agreement in
accordance with its terms, the Sellers shall cause the Company to:
5.4.1. cause to be done all things necessary to maintain, preserve
and renew its (i) corporate existence and all material
licenses, authorizations and permits necessary to the conduct
of its businesses and (ii) relationships with customers,
suppliers, employees and others in substantially the same
manner as it has prior to the date hereof;
5.4.2. comply in all material respects with all applicable Laws;
and
5.4.3. maintain proper books of record and account which present
fairly in all material respects its financial condition and
results of operations and make provisions on its financial
statements for all such proper reserves as in each case are
required in accordance with generally accepted accounting
principles, consistently applied.
5.5. Conduct of Business. During the period from the date of this
Agreement until the Closing Date, the Company will continue to
conduct its business and maintain its business relationships in the
ordinary and usual course and will not (except to the extent, but
only to the extent, deemed necessary by the officers and directors
of the Company in fulfilling their fiduciary duties), without the
prior written consent of the Purchaser,:
5.5.1. (i) declare, set aside or authorize the payment of, any
dividend or other distribution in respect of any shares of
capital stock of the Company or repurchase, redeem or acquire
any of the outstanding shares of any class of capital stock or
(ii) pay or otherwise distribute any other amounts or assets
to the Sellers, whether as compensation or otherwise;
5.5.2. split or combine the outstanding shares of its capital
stock of any class or enter into any recapitalization or
agreement affecting the number or rights of outstanding shares
of any class of its capital stock;
5.5.3. (i) award or pay any bonuses to employees of the Company,
(ii) enter into or modify or amend any employment, deferred
compensation, severance or similar agreement, (iii) increase
or agree to increase the compensation payable or to become
payable by it to any of the Company's directors, officers,
employees, agents or Representatives or (iv) increase or agree
to increase the coverage or benefits available under any
severance pay, termination pay, vacation pay, company awards,
salary continuation for disability, sick leave, deferred
compensation, bonus or other incentive compensation,
insurance, pension or other employee benefit plan, payment
Exhibit 99.4
Page 8
or arrangement made to, for or with such directors, officers,
employees, agents or Representatives;
5.5.4. change accounting principles, methods or policies;
5.5.5. enter into any Contract requiring payments in excess of
$5,000, or conduct its business other than in the ordinary
course of business consistent with past practice;
5.5.6. (i) incur or repay any Indebtedness, (ii) make any loans,
advances or capital contributions to any other Person or (iii)
assume, guarantee, endorse or otherwise become liable for the
obligations of any other Person.
5.5.7. fail to maintain and keep its properties in good repair,
working order and condition, normal wear and tear excepted;
5.5.8. fail to comply with all other obligations which it incurred
pursuant to any Contract or promptly pay or discharge any
current liabilities, as such obligations become due, unless
and to the extent that the same are being contested in good
faith and by appropriate proceedings and adequate reserves (as
determined in accordance with generally accepted accounting
principles, consistently applied) have been established on its
books with respect thereto;
5.5.9. mortgage, pledge or subject to any Lien any of its assets,
or acquire any assets or sell, assign, transfer, convey, lease
or otherwise dispose of any assets of the Company (other than
the sale of inventory in the ordinary course of business
consistent with past practice);
5.5.10. discharge or satisfy any Lien, or pay any obligation or
liability (fixed or contingent), except in the ordinary course
of business consistent with past practice and which, in the
aggregate, would not be material to the Company;
5.5.11. transfer or grant any rights under any concessions, leases,
licenses, agreements or Intellectual Property used by the
Company in its business;
5.5.12. make or commit to make any capital expenditures or capital
additions or betterments;
5.5.13. institute or settle any Legal Proceeding;
5.5.14. amend its certificate of incorporation or by-laws;
5.5.15. issue, sell or transfer any shares of its capital stock of
any class or any other of its securities, or issue or create
any options, warrants, calls, rights,
Exhibit 99.4
Page 9
commitments, subscriptions, convertible securities or other
agreements of any character requiring the Company to issue,
sell or transfer any shares of capital stock, or accelerate
the vesting of any outstanding security;
5.5.16. merge, consolidate or reorganize with, or acquire, any
entity;
5.5.17. agree to any audit assessment by any Tax authority or fail
to pay and discharge when payable all Taxes, assessments and
governmental charges imposed upon its properties or upon the
income or profits therefrom (in each case before the same
becomes delinquent and before penalties accrue thereon) and
all claims for labor, materials or supplies which if unpaid
would by law become a Lien upon any of its property;
5.5.18. change any insurance coverage, issue any certificates of
insurance or fail to continue in force with nationally
recognized insurance companies adequate insurance covering
risks of such types and in such amounts as are customary for
Persons engaged in similar lines of business;
5.5.19. enter into any transaction with, or become party to any
Contract with, any officer, director, or Affiliate (or any
relative of any of them) of the Company; or
5.5.20. agree to do, or enter into negotiations with respect to,
any of the things described in the preceding clauses in this
Section 5.5.
5.6. Regulatory Approvals. The Sellers will, and will cause the Company
to, promptly execute and file, or join in the execution and filing,
of any application or other document that may be necessary in order
to obtain the authorization, approval or consent of any
Governmental Body which may be reasonably required, or which the
Purchaser may reasonably request in connection with the
consummation of the transactions contemplated by this Agreement.
The Sellers will use its, and will cause the Company to use its,
best efforts to promptly obtain all such authorizations, approvals
and consents.
5.7. Necessary Consents. During the period from the date of this
Agreement until the Closing Date, the Sellers will use its, and
will cause the Company to use its, best efforts to obtain such
written consents and take such other actions as may be necessary or
appropriate to facilitate the consummation of the transactions
contemplated hereby and by the other Transaction Documents and to
allow the Purchaser to carry on the Company's business after the
Closing Date.
5.8. Access to Information. During the period from the date of this
Agreement until the earlier of the Closing Date or the termination
of this Agreement in accordance with its terms, the Sellers will,
and shall cause the Company to, (i) allow the Purchaser and its
Representatives reasonable access to the files, books,
Exhibit 99.4
Page 10
records, personnel and offices of the Company, including, without
limitation, any and all information relating to the Company's
Taxes, commitments, Contracts, and real, personal and intangible
property and financial condition, (ii) furnish promptly to the
Purchaser all information concerning the Company's business,
properties and personnel as the Purchaser may reasonably request,
and (iii) make available to the Purchaser the appropriate
individuals (including attorneys, accountants and other
professionals) for discussion of the Company's business, properties
and personnel as the Purchaser may reasonably request. The Sellers
will cause the Company's accountants to cooperate with the
Purchaser and its Representatives in making available to the
Purchaser all financial information reasonably requested,
including, without limitation, the right to examine all working
papers pertaining to all Tax returns and financial statements
prepared, reviewed or audited by such accountants.
5.9. Satisfaction of Conditions Precedent. During the period from the
date of this Agreement until the Closing Date, the Sellers will use
its, and will cause the Company to use its, best efforts to satisfy
or cause to be satisfied all the conditions precedent that are set
forth in Section 7.
5.10. Directors and Officers of the Company. As of the Closing Date, all
officer and directors of the Company shall resign and shall be
replaced by the Purchaser's nominees.
6. Covenants of the Purchaser.
6.1. Advise of Changes. During the period from the date of this
Agreement until the Closing Date, the Purchaser will promptly
advise the Sellers in writing (a) of any event occurring subsequent
to the date of this Agreement that would render any representation
or warranty of the Purchaser, as the case may be, contained in this
Agreement, if made on or as of the date of such event or the
Closing Date, materially inaccurate in any material respect, and
(b) of any breach by the Purchaser of any covenant or agreement
contained in this Agreement.
6.2. Regulatory Approvals. The Purchaser will promptly execute and
file, or join in the execution and filing, of any application or
other document that may be necessary in order to obtain the
authorization, approval or consent of any Governmental Body, or
which the Sellers may reasonably request in connection with the
consummation of the transactions contemplated by this Agreement.
The Purchaser will use their best efforts to promptly obtain all
such authorizations, approvals and consents.
6.3. Necessary Consents. During the term of this Agreement, the
Purchaser will use their best efforts to obtain such written
consents and take such other actions as may be necessary or
appropriate to facilitate the consummation of the transactions
contemplated hereby and by the other Transaction Documents.
Exhibit 99.4
Page 11
6.4. Satisfaction of Conditions Precedent. During the term of this
Agreement, the Purchaser will use their best efforts to satisfy or
cause to be satisfied all the conditions precedent that are set
forth in Section 7.
7. Conditions.
7.1. Conditions Precedent to Each Party's Obligations. The respective
obligations of each party hereunder are subject to the fulfillment
or satisfaction on or before the Closing Date of each of the
following conditions (any one or more of which may be waived in
writing by all of the parties to this Agreement):
7.1.1. Compliance with Law. There shall be no Law enacted,
entered, enforced or deemed applicable to the transactions
contemplated hereby or by the other Transaction Documents
which would prohibit or render illegal the transactions
contemplated hereby or thereby.
7.1.2. No Legal Proceedings or Orders. There shall not have been
instituted, pending or threatened any Legal Proceeding by or
before any Governmental Body, nor shall there be in effect any
Order issued by any Governmental Body, or threat of any Order,
that (i) prevents or seeks to prevent, or (ii) questions the
validity of this Agreement or the other Transaction Documents
or any action taken or to be taken in connection with the
consummation of the transactions contemplated hereby or
thereby.
7.2. Conditions Precedent to Obligations of the Sellers. The
obligations of each of the Sellers hereunder are subject to the
fulfillment or satisfaction on or before the Closing Date of each
of the following conditions (any one or more of which may be waived
in writing by the Sellers):
7.2.1. Accuracy of Representations and Warranties. The
representations and warranties of the Purchaser set forth in
Section 4 shall be true and accurate in all material respects
on and as of the Closing Date with the same force and effect
as if they had been made at the Closing, and the Sellers shall
receive a certificate to such effect signed by an officer of
the Purchaser.
7.2.2. Covenants. The Purchaser shall have performed and complied
in all material respects with all of its covenants required to
be performed by them under this Agreement on or before the
Closing Date.
7.3. Conditions Precedent To Obligations of the Purchaser.
7.3.1. The obligations of the Purchaser hereunder are subject to
the fulfillment or satisfaction on or before the Closing Date
of each of the following
Exhibit 99.4
Page 12
conditions (any one or more of which may be waived in writing
by the Purchaser):
7.3.2. Accuracy of Representations and Warranties. The
representations and warranties of each of the Sellers set
forth in Section 3 shall be true and accurate in all material
respects on and as of the Closing Date with the same force and
effect as if they had been made at the Closing, and the
Purchaser shall receive a certificate to such effect signed by
each of the Sellers.
7.3.3. Covenants. Each of the Purchasers shall have performed and
complied in all material respects with all of the covenants
required to be performed by such Sellers under this Agreement
on or before the Closing Date.
7.3.4. Documents. The Purchaser shall have received all written
consents, assignments, waivers, authorizations or other
certificates reasonably requested of the Company in writing to
provide for the continuation in full force and effect of any
and all material Contracts of the Company and for each of the
Sellers to consummate the transactions contemplated hereby and
by the other Transaction Documents.
7.3.5. Government Consents. There shall have been obtained on or
before the Closing Date such material Permits and there shall
have been taken such other action, as may be required to
consummate the transactions contemplated hereby and by the
other Transaction Documents by any Government Body having
jurisdiction over the parties and the actions herein proposed
to be taken, including but not limited to requirements under
applicable federal and state securities laws.
7.3.6. Satisfactory Completion of Due Diligence. The Purchaser
shall have (i) received all due diligence materials requested
by the Purchaser from the Company and the Sellers and shall be
satisfied in their sole discretion with the results of their
review and analysis of such materials, and (ii) conducted
interviews with such members of the Company's management or
such other personnel as the Purchaser shall have requested and
shall be satisfied in their sole discretion with the results
of such interviews.
8. Further Agreements of the Parties.
8.1. Indemnity. The Sellers and, until the Closing, the Company,
agrees to indemnify, defend and hold harmless the Purchaser (and
each officer, director, shareholder, affiliate, agent and permitted
assign thereof) from and against any and all losses, liabilities,
damages, deficiencies, costs or expenses (including interest,
penalties, and attorneys' fees, disbursements and related charges)
(collectively, "Losses") based upon, arising out of or otherwise in
respect of any inaccuracy in or breach of any representations,
warranties, covenants or
Exhibit 99.4
Page 13
agreements of the Company or of the Sellers contained in this
Agreement or the other Transaction Documents.
8.2. The Purchaser agrees to indemnify, defend and hold harmless the
Company (and each officer, director, shareholder, affiliate, agent
and permitted assign thereof)and the Sellers from and against any
and all Losses based upon, arising out of or otherwise in respect
of any inaccuracy in or breach of any representations, warranties,
covenants or agreements of the Purchaser contained in this
Agreement or the other Transaction Documents.
8.3. The indemnification provided for in Section 10 shall be an
exclusive remedy for the parties, and the other individuals and
entities entitled to indemnification thereby.
9. Miscellaneous.
9.1. Survival of Representations and Warranties. The representations
and warranties of the Sellers contained in this Agreement shall
survive the Closing for the benefit of the Purchaser until one year
following the Closing Date. The representations and warranties of
the Purchaser shall survive the Closing for the benefit of the
Sellers until one year following the Closing Date.
9.2. Certain Definitions.
"Closing" shall have the meaning set forth in Section 1
hereof.
"Closing Date" shall have the meaning set forth in Section 1
hereof.
"Common Stock" means shares of the Company's Common Stock, par
value $.01 per share.
"Confidential Information" shall mean confidential records and
information, including, but not limited to, development, marketing, purchasing,
organizational, strategic, financial, managerial, administrative, manufacturing,
production, distribution and sales information, distribution methods, data,
specifications and processes presently owned or at any time hereafter developed
by a Person or its agents or consultants or used presently or at any time
hereafter in the course of the business of such Person, that are not otherwise
part of the public domain.
"Contract" means any contract, agreement, indenture, note,
bond, loan, instrument, lease, conditional sale contract, mortgage, license,
franchise, insurance policy. commitment or other arrangement or agreement,
whether written or oral.
"Environmental Claim" means any accusation, allegation, notice
of violation, action, claim, Lien, demand, abatement or other Order or direction
(conditional
Exhibit 99.4
Page 14
or otherwise) by any Governmental Body or any Person for personal injury
(including sickness, disease or death), tangible or intangible property damage,
damage to the environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or restrictions resulting
from or based upon the violation, or alleged violation, of any Environmental
Laws, Orders or Permits of or from any Governmental Body relating to
environmental matters connected with the Facilities.
"Environmental Law" means any Law concerning the environment,
or activities that might threaten or result in damage to the environment or
human health, or any Law that is concerned in whole or in part with the
environment and with protecting or improving the quality of the environment and
human and employee health and safety.
"Environmental Matters" means any matter arising out of or
relating to human and employee health and safety or the environment which could
give rise to liability or require the expenditure of money to address.
"Facilities" means real property, leased or operated by the
Company.
"Governmental Body" means any governmental or regulatory body,
whether federal, state, local or foreign, or any agency, instrumentality or
authority thereof, or any court or arbitrator (public or private).
"Indebtedness" means at a particular time, without
duplication, (i) any indebtedness for borrowed money or issued in substitution
for or exchange of indebtedness for borrowed money, including any bank overdraft
or other similar extension of credit, (ii) any indebtedness evidenced by any
note, bond, debenture or other debt security, (iii) any indebtedness for the
deferred purchase price of property or services with respect to which a Person
is liable, contingently or otherwise, as obligor or otherwise (other than trade
payables and other current liabilities incurred in the ordinary course of
business which are not more than 30 days past due), (iv) any commitment by which
a Person assures a creditor against loss (including, without limitation,
contingent reimbursement obligations with respect to letters of credit), (v) any
indebtedness guaranteed in any manner by a Person (including, without
limitation, guarantees in the form of an agreement to repurchase or reimburse),
(vi) any obligations under capitalized leases with respect to which a Person is
liable, contingently or otherwise, as obligor, guarantor or otherwise, or with
respect to which obligations a Person assures a creditor against loss, (vii) any
indebtedness secured by a Lien on a Person's assets and (viii) any unsatisfied
obligation for "withdrawal liability" to a multiemployer plan" as such terms are
defined under ERISA.
"Law" means any federal, state, local or foreign law
(including common law), statute, code, ordinance, rule, regulation or other
requirement or guideline.
"Legal Proceeding" means any judicial, administrative or
arbitral actions, suits, proceedings (public or private), claims or governmental
proceedings.
Exhibit 99.4
Page 15
"Lien" means any lien, pledge, hypothecation, levy, mortgage,
deed of trust, security interest, claim, lease, charge, option, right of first
refusal, easement, or other real estate declaration, covenant, condition,
restriction or servitude, transfer restriction under any shareholder or similar
agreement, encumbrance or any other restriction or limitation whatsoever.
"Material Adverse Change" means any material adverse change in
the business, properties, results of operations, prospects or condition
(financial or otherwise) of the relevant party; provided, however, that
notwithstanding any other provision of this Agreement, none of the following
shall be deemed in themselves, either alone or in combination, to constitute,
and none of the following shall be taken into account in determining whether
there has been or will be, a Material Adverse Change:(a) any failure by the
relevant party to meet internal projections or forecasts or published revenue or
earnings predictions for any period ending (or for which revenues or earnings
are released) on or after the date of this Agreement; (b) any adverse change,
effect, event, occurrence, state of facts or development to the extent
attributable to the announcement or pendency of the transaction documented by
this Agreement (including any cancellations of or delays in customer orders, any
reduction in sales, any disruption in supplier, distributor, partner or similar
relationships or any loss of employees); (c) any adverse change, effect, event,
occurrence, state of facts or development attributable to conditions affecting
the industries in which the relevant party participates, the U.S. economy as a
whole or foreign economies in any locations where the relevant party or any of
its subsidiaries has material operation or sales; (d) any adverse change,
effect, event, occurrence, state of facts or development attributable or
relating to (i) out-of-pocket fees and expenses (including legal, accounting,
and other fees and expenses) incurred in connection with the transactions
contemplated by this Agreement, or (ii) the payment of any amounts due to, or
the provision of any other benefits (including benefits relating to acceleration
of stock options) to, any officers or employees under employment contracts,
non-competition agreements, employee benefit plans, severance arrangements or
other arrangements in existence as of the date of this Agreement, (if any
adverse change, effect, event, occurrence, state of facts or development
resulting from or relating to compliance with the terms of, or the taking of any
action required by, this Agreement); (e) any adverse change, effect, event,
occurrence, state of facts or development arising from or relating to any change
in accounting requirements or principles or any change in applicable laws, rules
or regulations or the interpretation thereof; or (f) any adverse change, effect,
event, occurrence, state of facts or development arising from or relation to
actions required to be taken under applicable laws, rules, regulations,
contracts or agreements.
"Order" means any order, consent, consent order, injunction,
judgment, decree, consent decree, ruling, writ, assessment or arbitration award.
"Permits" means any approvals, authorizations, registrations,
consents, licenses, permits or certificates by any Governmental Body.
Exhibit 99.4
Page 16
"Person" means any individual, corporation, partnership, firm,
joint venture, association, joint-stock company, trust, unincorporated
organization, Governmental Body or other entity.
"Representatives" of a Person means its officers, employees,
agents, legal advisors and accountants.
"Shares" means the Common Stock to be purchased hereunder.
9.3. Expenses. Except as otherwise expressly provided herein, all costs
and expenses incurred in connection with the Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such expenses whether or not the transaction is
consummated.
9.4. Further Assurances. The Sellers and the Purchaser agree to execute
and deliver, at the requesting party's expense, such other
reasonable documents or agreements as may be necessary or desirable
for the implementation of this Agreement and the consummation of
the transactions contemplated hereby or by the other Transaction
Documents.
9.5. Submission to Jurisdiction; Waiver of Jury Trial; and Consent to
Service of Process.
9.5.1. The parties hereto hereby irrevocably submit to the
exclusive jurisdiction of any federal or state court located
within the State of New York over any dispute arising out of
or relating to this Agreement or any of the transactions
contemplated hereby or by the other Transaction Documents and
each party hereby irrevocably agrees that all claims in
respect of such dispute or any suit, action or proceeding
related thereto may be heard and determined in such courts.
The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now
or hereafter have to the laying of venue of any such dispute
brought in such court or any defense of inconvenient forum for
the maintenance of such dispute. Each of the parties hereto
agrees that a judgment in any such dispute may be enforced in
other jurisdictions by suit on the judgment or in any other
manner provided by law.
9.5.2. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY OF THE
OTHER TRANSACTION DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
Exhibit 99.4
Page 17
ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE PARTIES' ACCEPTANCE OF THIS AGREEMENT.
9.5.3. Each of the parties hereto hereby consents to process being
served by any party to this Agreement in any suit, action or
proceeding, by the mailing of a copy thereof in accordance
with the provisions of Section 11.9.
9.6. Entire Agreement; Amendments and Waivers. This Agreement
(including any schedules and exhibits hereto) represents the entire
understanding and agreement between the parties hereto with respect
to the subject matter hereof and can be amended, supplemented or
changed, and any provision hereof can be waived, only by written
instrument making specific reference to this Agreement signed by
the parties hereto. No action taken pursuant to this Agreement,
including without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representation, warranty,
covenant or agreement contained herein. The waiver by any party
hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such
breach or as a waiver of any other or subsequent breach. No failure
on the part of any party to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right,
power or remedy by such party preclude any other or further
exercise thereof or the exercise of any other right, power or
remedy.
9.7. Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Florida
without giving effect to the principles of conflict of laws
thereunder.
9.8. Table of Contents and Headings. The table of contents and section
headings of this Agreement are for reference purposes only and are
to be given no effect in the construction or interpretation of this
Agreement.
9.9. Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have
been duly given when (a) delivered by hand, (b) sent by facsimile
(with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested (provided that
facsimile notice shall be deemed received on the next business day
if received after 5:00 p.m. Eastern Standard Time), or (c) when
received by the addressee, if sent by a nationally recognized
overnight delivery service, in each case to the appropriate
addresses and telecopier numbers set forth below (or to such other
addresses and facsimile numbers as a party may designate by notice
to the other parties):
If to Purchaser to:
------------------
Exhibit 99.4
Page 18
Thomas Banks Ltd.
Attn: Chester Rothrock
#4-2443 Barrio Don Bosco
San Jose, Costa Rica
If to the Company or Sellers to:
-------------------------------
The Finx Group, Inc.
Attn: Lewis S. Schiller
249 Saw Mill River Road
Elmsford, NY 10523
(914) 592-6014 (facsimile)
9.10. Severability. If any term, provision, covenant or condition of
this Agreement or part thereof, or the application thereof to any
Person, place or circumstance shall be held to be invalid,
unenforceable or void by a court of competent jurisdiction, the
remainder of this Agreement and such term, provision, covenant or
condition shall remain in full force and effect, and any such
invalid, unenforceable or void term, provision, covenant or
condition shall be deemed, without further action on the part of
the parties hereto, modified, amended and limited, and the court
shall have the power to modify, amend, and limit such term,
provision, covenant or condition, to the extent necessary to render
the same and the remainder of this Agreement valid, enforceable and
lawful.
Exhibit 99.4
Page 19
9.11. Binding Effect, Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective
successors and permitted assigns. Nothing in this Agreement shall
create or be deemed to create any third party beneficiary rights or
any other rights of any kind in any Person or entity not a party to
this Agreement except as specifically provided herein. No
assignment of this Agreement or of any rights or obligations
hereunder may be made by the Sellers (by operation of law or
otherwise) without the prior written consent of the Purchaser and
any attempted assignment without such required consent shall be
void.
9.12. Confidential Information. All Confidential Information with
respect to any party hereto is considered secret and will be
disclosed in confidence. Each party hereto acknowledges that, it
may have access to and become acquainted with Confidential
Information of another party. Each party hereto agrees that it will
not prior to the Closing Date (or in the event of the termination
of this Agreement in accordance with its terms) and at all times
thereafter, directly or indirectly for any reason whatsoever,
disclose or use any such Confidential Information. All records,
files, drawings, documents, equipment and other tangible items,
wherever located, relating in any way to or containing Confidential
Information, which any party has prepared or shall in the future
prepare, shall be and remain the sole and exclusive property of
such party and shall be included in the Confidential Information.
Upon termination of this Agreement in accordance with its terms,
the parties shall promptly deliver any and all of the Confidential
Information and copies thereof of any other party, not previously
delivered to such party, that may be in its possession or under its
control. The foregoing restrictions shall not apply to the use,
divulgence, disclosure or grant of access to Confidential
Information to the extent, but only to the extent, (i) expressly
permitted or required pursuant to any other written agreement
between the parties, (ii) such Confidential Information has been
publicly disclosed (not due to a breach by any party of its
obligations hereunder, or by breach of any other Person, of a
fiduciary or confidential obligation to a party) or (iii) a party
is required to disclose Confidential Information by or to any court
of competent jurisdiction or any other Governmental Body; provided,
however, that the party required to disclose such Confidential
Information shall, prior to any such disclosure, immediately notify
the party which owns the Confidential Information of such
requirement and provided further, that such party shall have the
right, at its expense, to object to such disclosures and to seek
confidential treatment of any Confidential Information to be so
disclosed on such terms as it shall determine.
9.13. Public Announcement. The parties shall cooperate with respect to
any public announcement relating to the transactions contemplated
hereby or by the other Transaction Documents; and neither party
will issue any public statement announcing such transaction without
the prior consent of the others, except as
Exhibit 99.4
Page 20
such party in good faith (based upon advice of counsel) believes is
required by law and following notice to the other party.
9.14. Counterparts. This Agreement may be executed in multiple
counterparts each of which shall be an original but all of which
together shall constitute one and the same instrument. This
Agreement may also be executed and delivered by exchange of
facsimile copies showing the signatures of the parties, and those
signatures need not be affixed to the same copy. The facsimile
copies showing the signatures of the parties will constitute
originally signed copies of the Agreement requiring no further
execution.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
Exhibit 99.4
Page 21
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above.
ATTEST: THE FINX GROUP, INC.
________________________ By: ___________________________
SIGNATURE LEWIS S. SCHILLER
CHIEF EXECUTIVE OFFICER
------------------------
PRINT NAME
.........................................................................
ATTEST SHOPCLUE.COM, Inc.
________________________ By: ___________________________
SIGNATURE LEWIS S. SCHILLER
CHIEF EXECUTIVE OFFICER
------------------------
PRINT NAME
.........................................................................
ATTEST LEWIS S. SCHILLER
________________________ By: ___________________________
SIGNATURE LEWIS S. SCHILLER
------------------------
PRINT NAME
.........................................................................
ATTEST GRAZYNA B. WNUK
________________________ By: ___________________________
SIGNATURE GRAZYNA B. WNUK
------------------------
PRINT NAME
Exhibit 99.4
Page 22
.........................................................................
ATTEST CAROL SCHILLER
________________________ By: ___________________________
SIGNATURE CAROL SCHILLER
------------------------
PRINT NAME
.........................................................................
ATTEST BLAKE SCHILLER
________________________ By: ___________________________
SIGNATURE BLAKE SCHILLER
------------------------
PRINT NAME
.........................................................................
ATTEST DOUGLAS SCHILLER
________________________ By: ___________________________
SIGNATURE DOUGLAS SCHILLER
------------------------
PRINT NAME
.........................................................................
ATTEST LINDA SCHILLER IGLES
________________________ By: ___________________________
SIGNATURE LINDA SCHILLER IGLES
------------------------
PRINT NAME
Exhibit 99.4
Page 23
.........................................................................
ATTEST BIZCHASE, Inc.
________________________ By: ___________________________
SIGNATURE LEWIS S. SCHILLER
CHIEF EXECUTIVE OFFICER
------------------------
PRINT NAME
.........................................................................
ATTEST: Thomas Banks Ltd.
________________________ By: ___________________________
SIGNATURE CHESTER ROTHROCK
MANAGING DIRECTOR
------------------------
PRINT NAME
Exhibit 99.4
Page 24
Exhibit 99.5
STOCK PURCHASE AGREEMENT
BY AND AMONG
THE FINX GROUP, INC.
SEQUENTIAL ELECTRONIC SYSTEMS, INC.,
S-TECH, INC.,
DEFENSE MANUFACTURING AND SYSTEMS, INC.
AND
TRINITY GROUP ACQUISITION CORP.
Dated: As of September 30, 2002
Exhibit 99.5
Page 1
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of September 30, 2002 (the
"Agreement"), among The Finx Group, Inc., a corporation organized under the laws
of the State of Delaware (the "Seller") with an office at 249 Saw Mill River
Road, Elmsford, New York 10523, Sequential Electronic Systems, Inc., S-Tech,
Inc. and Defense Manufacturing and Systems, Inc., all corporations organized
under the laws of the State of Delaware with an office at 249 Saw Mill River
Road, Elmsford, New York 10523, (the "Companies") and Trinity Group Acquisition
Corp., a corporation with an office at 21634 Club Villa Terrace, Boca Raton, FL
33433 (the "Purchaser").
WITNESSETH:
--------------------
The Seller holds 100% the Companies' shares of common stock
and 100% of the Companies' shares of preferred stock, par value $.01 per share
(the "Preferred Stock"), (the "Shares").
The Purchaser desires to acquire from the Seller, and the
Seller desires to sell to the Purchaser, for the consideration hereinafter
provided, the Shares; and
Certain terms used in this Agreement are defined in Section
9.2 of this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual
covenants and agreements hereinafter contained, the parties hereto, intending to
be legally bound, hereby agree as follows:
Exhibit 99.5
Page 2
1. Sale and Purchase of Shares; the Closing.
1.1. Sale and Purchase of Shares. Subject to the terms and conditions
of this Agreement and on the basis of the representations,
warranties, covenants and agreements herein contained, on the
Closing Date, the Seller shall sell, assign and convey to the
Purchaser, and the Purchaser shall purchase, acquire and accept
from the Seller, all of the Shares of such Seller. At the Closing,
the Seller shall deliver one or more stock certificates
representing the Shares of the Seller duly endorsed for transfer to
the Purchaser.
1.2. The Closing. The consummation of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of
the parties to the transaction upon execution of this Agreement on
September 30, 2002 or at such other time and date as the parties
hereto mutually agree (the "Closing Date").
2. Consideration.
2.1. Consideration. The consideration for the Shares shall be as
follows:
2.1.1. One Dollar ($1).
2.1.2. The cancellation of indebtedness owed by the Companies to
the Seller and the Seller's affiliates and or subsidiaries.
3. Representations and Warranties of the Sellers. The Seller hereby
represent and warrant to the Purchaser, that to the best of their
knowledge:
3.1. Organization and Good Standing.
3.1.1. The Companies is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to own,
lease and operate its properties and to carry on its business
as it is now conducted and as it is proposed to be conducted.
3.1.2. The minute books of the Companies contain accurate records
of all meetings and all other material corporate action of the
Companies' boards of directors (including any committees
thereof) and its stockholders since the date of the Companies'
incorporation.
3.2. Authorization of Agreement. The Seller has all requisite capacity,
power and authority to execute and deliver this Agreement and each
other agreement, document, instrument or certificate contemplated
by this Agreement or to be executed by such Seller in connection
with the consummation of the transactions contemplated by this
Agreement (this Agreement and the other agreements, documents,
instruments or certificates
Exhibit 99.5
Page 3
delivered pursuant to this Agreement are hereinafter referred to as
the "Transaction Documents"), and to perform fully its obligations
hereunder and thereunder. This Agreement has been, and each of the
other Transaction Documents will be (when executed and delivered by
the Seller), duly and validly authorized, executed and delivered by
the Seller and this Agreement constitutes, and each of the other
Transaction Documents will constitute (when executed and delivered
by the Seller), legal, valid and binding obligations of the Seller,
enforceable against the Seller in accordance with their respective
terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and to general principles
of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
3.3. Subsidiaries. The Companies has no subsidiaries and does not own
any other capital stock or other proprietary interest, directly or
indirectly, in any corporation, association, trust, partnership,
joint venture or other entity or have any agreement to acquire any
such capital stock or other proprietary interest except for the
following:
3.3.1. None.
3.4. No Conflicts; Consents of Third Parties. The execution and
delivery by the Seller of this Agreement and the other Transaction
Documents, the consummation of the transactions contemplated hereby
or thereby, and the compliance by the Seller with any of the
provisions hereof or thereof does not and will not (i) conflict
with, or result in the breach of, any provision of the certificate
of incorporation or by-laws of the Companies; (ii) conflict with,
violate, result in the breach or termination of, or constitute a
default or give rise to any "takeback" right or right of
termination or acceleration or right to increase the obligations or
otherwise modify the terms thereof under any Contract, Permit or
Order to which the Companies is a party or by which the Companies
or the properties or assets of the Seller are bound; (iii)
constitute a violation of any Law applicable to the Companies; or
(iv) result in the creation of any Lien upon the properties or
assets of the Companies or the Seller.
3.5. Capitalization.
3.5.1. The authorized capital stock of the Sequential Electronic
Systems, Inc. consists of 1,500 no par value shares of Common
Stock and as of the date hereof, 100 shares of Common Stock
are issued and outstanding, all of which are owned of record
and beneficially by the Seller; the authorized capital stock
of the S-Tech, Inc. consists of 1,500 no par value shares of
Common Stock no par stock and as of the date hereof, 1,500
shares of Common Stock are issued and outstanding, all of
which are owned of record and beneficially by the Seller; and
the authorized capital stock of Defense Manufacturing and
Systems, Inc. consists of 1,500 shares of Common Stock, par
value $0.1 per share and 1,000 shares of Preferred Stock and
as of the date hereof, no shares are issued and outstanding
and all such issued and outstanding shares of the Companies
constitute the Shares. There is no existing option, warrant,
call,
Exhibit 99.5
Page 4
right, commitment or other agreement of any character to which
the Companies is a party requiring, and there are no
securities of the Companies outstanding which upon conversion
or exchange would require, the issuance, sale or transfer of
any additional shares of capital stock or other equity
securities of the Companies or other securities convertible
into, exchangeable for or evidencing the right to subscribe
for or purchase shares of capital stock or other equity
securities of the Companies. Neither the Companies nor the
Seller is a party to any voting trust or other voting
agreement with respect to any shares of capital stock or to
any agreement relating to the issuance, sale, redemption,
transfer or other disposition of capital stock of the
Companies
3.5.2. The Shares purchased by the Purchaser will, at the Closing,
constitute 100% all of the issued and outstanding capital
stock of the Companies on a fully diluted basis.
3.6. Financial Statements. Set forth on Schedule 3.6 of the Disclosure
Schedules are (i) copies of the Companies' unaudited balance sheets
as of June 30, 2002 and December 31, 2001 and the related unaudited
statements of income and of cash flows for the three and six month
periods ended June 30, 2002 and 2001, (the "Unaudited Financial
Statements"). The Unaudited Financial Statements have been prepared
on a going concern basis, which contemplates the realization of
assets and the liquidation of liabilities in the normal course of
business. However, the Companies has a history of net losses and
has a working capital deficiency. The Unaudited Financial
Statements do not include any adjustments that would result should
the Companies be unable to continue as a going concern.
3.7. There have not been any amendments or changes in the certificate
of incorporation or the by-laws of the Companies.
3.8. The Companies has caused to be done all things materially
necessary to maintain, preserve and renew its corporate existence
and all material licenses, authorizations and permits necessary to
the conduct of its business.
4. Representations and Warranties of the Purchaser. The Purchaser hereby,
jointly and severally, represent and warrant to the Sellers that:
4.1. Organization and Good Standing. The Purchaser is a corporation
duly organized, validly existing and in good standing. The
Purchaser has full corporate power and authority to own, lease and
operate their properties and to carry on their business as it is
now conducted and as it is proposed to be conducted.
4.2. Authorization of Agreement. The Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement
and each of the other Transaction Documents to be executed by the
Purchaser in connection with the consummation of the transactions
contemplated hereby and thereby, and to perform fully their
obligations hereunder and thereunder. The execution, delivery and
performance by the Purchaser of
Exhibit 99.5
Page 5
this Agreement and each of the other Transaction Documents to be
executed by the Purchaser has been duly authorized by all necessary
action on behalf of the Purchaser. This Agreement has been, and
each of the other Transaction Documents will be (when executed and
delivered by the Purchaser), duly and validly executed and
delivered by the Purchaser and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto)
this Agreement constitutes, and each of the other Transaction
Documents will constitute (when executed and delivered by the
Purchaser), legal, valid and binding obligations of the Purchaser,
enforceable against the Purchaser in accordance with their
respective terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject to
general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity).
4.3. No Conflicts; Consents of Third Parties. The execution and
delivery by the Purchaser of this Agreement and the other
Transaction Documents to be executed by the Purchaser, the
consummation of the transactions contemplated hereby or thereby,
and the compliance by the Purchaser with any of the provisions
hereof or thereof does not and will not (a) conflict with, or
result in the breach of, the certificate of incorporation or
by-laws of the Purchaser, (b) conflict with, violate, result in the
breach of, or constitute a default under any Contract or Order to
which the Purchaser is a party or by which the Purchaser or their
properties or assets are bound or (c) constitute a violation by the
Purchaser of any Law applicable to the Purchaser. No consent,
waiver, approval, Order, Permit or authorization of, or declaration
or filing with, or notification to, any Person or Governmental Body
is required on the part of the Purchaser in connection with the
execution and delivery of this Agreement or the other Transaction
Documents to be executed by the Purchaser or the compliance by the
Purchaser with any of the provisions hereof or thereof which has
not been made or obtained.
4.4. Litigation. There are no Legal Proceedings against the Purchaser
pending or, to the best knowledge of the Purchaser, threatened that
question the validity of this Agreement or any of the other
Transaction Documents or any action taken or to be taken by the
Purchaser in connection with the consummation of the transactions
contemplated hereby or thereby. There is no action, suit,
investigation or proceeding (or, to the knowledge of the Purchaser,
any basis therefor) pending against, or to the knowledge of the
Purchaser threatened, against or affecting the Purchaser, any of
their Subsidiaries or any of their properties before any court or
arbitrator or any governmental body, agency or official that if
adversely determined against the Purchaser, would result in a
Material Adverse Change to the Purchaser.
4.5. No Misrepresentation. No representation or warranty of the
Purchaser contained in this Agreement (including the Disclosure
Schedules hereto) or in any other Transaction Document furnished to
the Seller pursuant to the terms hereof contains or will contain
any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained
herein or therein, in light of the circumstances under which they
were made, not misleading. The Purchaser does not
Exhibit 99.5
Page 6
know of any facts which have caused or in the future are reasonably
likely to cause a Material Adverse Change which has not been
disclosed herein or in a Disclosure Schedule hereto. The
representations and warranties contained in this Section 4 or
elsewhere in this Agreement or in any other Transaction Document
shall not be affected or deemed waived by reason of the fact that
any Seller and/or any Representative of any Seller knows or should
have known that any such representation or warranty is or might be
inaccurate in any respect.
5. Additional Representations, Warranties and Covenants.
5.1. Title and Investment Representations. The Seller represents and
warrants to, and covenants and agrees with the Purchaser that, it
has good and marketable title to the Shares of the Seller, free and
clear of all Liens of any kind or nature whatsoever and that at the
Closing, the Purchaser will obtain good and marketable title to
such Shares, free and clear as aforesaid.
5.2. Information Representations. The Seller represents and warrants
that (i) such Seller, and his Representatives as deemed necessary
by such Seller (including such Seller's professional, tax and other
advisors), have carefully reviewed the materials (the "Materials")
furnished by the Purchaser to such Seller in connection with the
transactions contemplated by this Agreement and (ii) such Seller,
and such Seller's Representatives, have been granted the
opportunity to ask questions of, and receive answers from,
Representatives of the Purchaser concerning the Purchaser and to
obtain any additional information that such Seller deemed necessary
to verify the accuracy of the information contained herein.
5.3. Advise of Changes. During the period from the date of this
Agreement until the earlier of the Closing Date, the Companies will
promptly advise the Purchaser in writing of the following, to the
extent it has knowledge of the same: (a) of any event occurring
subsequent to the date of this Agreement that would render any
representation or warranty of the Seller contained in this
Agreement, if made on or as of the date of such event or the
Closing Date, materially inaccurate, (b) of any Material Adverse
Change, and (c) of any breach by the Seller of any covenant or
agreement contained in any Transaction Document.
5.4. Maintenance of Business. From the date hereof until the earlier of
the Closing Date and the termination of this Agreement in
accordance with its terms, the Seller shall cause the Companies to:
5.4.1. cause to be done all things necessary to maintain, preserve
and renew its (i) corporate existence and all material
licenses, authorizations and permits necessary to the conduct
of its businesses and (ii) relationships with customers,
suppliers, employees and others in substantially the same
manner as it has prior to the date hereof;
Exhibit 99.5
Page 7
5.4.2. comply in all material respects with all applicable Laws;
and
5.4.3. maintain proper books of record and account which present
fairly in all material respects its financial condition and
results of operations and make provisions on its financial
statements for all such proper reserves as in each case are
required in accordance with generally accepted accounting
principles, consistently applied.
5.5. Conduct of Business. During the period from the date of this
Agreement until the Closing Date, the Companies will continue to
conduct its business and maintain its business relationships in the
ordinary and usual course and will not (except to the extent, but
only to the extent, deemed necessary by the officers and directors
of the Companies in fulfilling their fiduciary duties), without the
prior written consent of the Purchaser,:
5.5.1. (i) declare, set aside or authorize the payment of, any
dividend or other distribution in respect of any shares of
capital stock of the Companies or repurchase, redeem or
acquire any of the outstanding shares of any class of capital
stock or (ii) pay or otherwise distribute any other amounts or
assets to the Seller, whether as compensation or otherwise;
5.5.2. split or combine the outstanding shares of its capital
stock of any class or enter into any recapitalization or
agreement affecting the number or rights of outstanding shares
of any class of its capital stock;
5.5.3. (i) award or pay any bonuses to employees of the Companies,
(ii) enter into or modify or amend any employment, deferred
compensation, severance or similar agreement, (iii) increase
or agree to increase the compensation payable or to become
payable by it to any of (the "Shares") the Companies'
directors, officers, employees, agents or Representatives or
(iv) increase or agree to increase the coverage or benefits
available under any severance pay, termination pay, vacation
pay, company awards, salary continuation for disability, sick
leave, deferred compensation, bonus or other incentive
compensation, insurance, pension or other employee benefit
plan, payment or arrangement made to, for or with such
directors, officers, employees, agents or Representatives;
5.5.4. change accounting principles, methods or policies;
5.5.5. enter into any Contract requiring payments in excess of
$5,000, or conduct its business other than in the ordinary
course of business consistent with past practice;
5.5.6. (i) incur or repay any Indebtedness, (ii) make any loans,
advances or capital contributions to any other Person or (iii)
assume, guarantee, endorse or otherwise become liable for the
obligations of any other Person.
5.5.7. fail to maintain and keep its properties in good repair,
working order and condition, normal wear and tear excepted;
Exhibit 99.5
Page 8
5.5.8. fail to comply with all other obligations which it incurred
pursuant to any Contract or promptly pay or discharge any
current liabilities, as such obligations become due, unless
and to the extent that the same are being contested in good
faith and by appropriate proceedings and adequate reserves (as
determined in accordance with generally accepted accounting
principles, consistently applied) have been established on its
books with respect thereto;
5.5.9. mortgage, pledge or subject to any Lien any of its assets,
or acquire any assets or sell, assign, transfer, convey, lease
or otherwise dispose of any assets of the Companies (other
than the sale of inventory in the ordinary course of business
consistent with past practice);
5.5.10. discharge or satisfy any Lien, or pay any obligation or
liability (fixed or contingent), except in the ordinary course
of business consistent with past practice and which, in the
aggregate, would not be material to the Companies;
5.5.11. transfer or grant any rights under any concessions, leases,
licenses, agreements or Intellectual Property used by the
Companies in its business;
5.5.12. make or commit to make any capital expenditures or capital
additions or betterments;
5.5.13. institute or settle any Legal Proceeding;
5.5.14. amend its certificate of incorporation or by-laws;
5.5.15. issue, sell or transfer any shares of its capital stock of
any class or any other of its securities, or issue or create
any options, warrants, calls, rights, commitments,
subscriptions, convertible securities or other agreements of
any character requiring the Companies to issue, sell or
transfer any shares of capital stock, or accelerate the
vesting of any outstanding security;
5.5.16. merge, consolidate or reorganize with, or acquire, any
entity;
5.5.17. agree to any audit assessment by any Tax authority or fail
to pay and discharge when payable all Taxes, assessments and
governmental charges imposed upon its properties or upon the
income or profits therefrom (in each case before the same
becomes delinquent and before penalties accrue thereon) and
all claims for labor, materials or supplies which if unpaid
would by law become a Lien upon any of its property;
5.5.18. change any insurance coverage, issue any certificates of
insurance or fail to continue in force with nationally
recognized insurance companies adequate
Exhibit 99.5
Page 9
insurance covering risks of such types and in such amounts as
are customary for Persons engaged in similar lines of
business;
5.5.19. enter into any transaction with, or become party to any
Contract with, any officer, director, or Affiliate (or any
relative of any of them) of the Companies; or
5.5.20. agree to do, or enter into negotiations with respect to,
any of the things described in the preceding clauses in this
Section 5.5.
5.6. Regulatory Approvals. The Seller will, and will cause the Companies
to, promptly execute and file, or join in the execution and filing,
of any application or other document that may be necessary in order
to obtain the authorization, approval or consent of any
Governmental Body which may be reasonably required, or which the
Purchaser may reasonably request in connection with the
consummation of the transactions contemplated by this Agreement.
The Seller will use its, and will cause the Companies to use its,
best efforts to promptly obtain all such authorizations, approvals
and consents.
5.7. Necessary Consents. During the period from the date of this
Agreement until the Closing Date, the Seller will use its, and will
cause the Companies to use its, best efforts to obtain such written
consents and take such other actions as may be necessary or
appropriate to facilitate the consummation of the transactions
contemplated hereby and by the other Transaction Documents and to
allow the Purchaser to carry on the Companies' business after the
Closing Date.
5.8. Access to Information. During the period from the date of this
Agreement until the earlier of the Closing Date or the termination
of this Agreement in accordance with its terms, the Sellers will,
and shall cause the Companies to, (i) allow the Purchaser and its
Representatives reasonable access to the files, books, records,
personnel and offices of the Companies, including, without
limitation, any and all information relating to the Companies'
Taxes, commitments, Contracts, and real, personal and intangible
property and financial condition, (ii) furnish promptly to the
Purchaser all information concerning the Companies' business,
properties and personnel as the Purchaser may reasonably request,
and (iii) make available to the Purchaser the appropriate
individuals (including attorneys, accountants and other
professionals) for discussion of the Companies' business,
properties and personnel as the Purchaser may reasonably request.
The Seller will cause the Companies' accountants to cooperate with
the Purchaser and its Representatives in making available to the
Purchaser all financial information reasonably requested,
including, without limitation, the right to examine all working
papers pertaining to all Tax returns and financial statements
prepared, reviewed or audited by such accountants.
5.9. Satisfaction of Conditions Precedent. During the period from the
date of this Agreement until the Closing Date, the Seller will use
its, and will cause the Companies to use its, best efforts to
satisfy or cause to be satisfied all the conditions precedent that
are set forth in Section 7.
Exhibit 99.5
Page 10
5.10. Directors and Officers of the Companies. As of the Closing Date,
all officer and directors of the Companies shall resign and shall
be replaced by the Purchaser's nominees.
6. Covenants of the Purchaser.
6.1. Advise of Changes. During the period from the date of this
Agreement until the Closing Date, the Purchaser will promptly
advise the Seller in writing (a) of any event occurring subsequent
to the date of this Agreement that would render any representation
or warranty of the Purchaser, as the case may be, contained in this
Agreement, if made on or as of the date of such event or the
Closing Date, materially inaccurate in any material respect, and
(b) of any breach by the Purchaser of any covenant or agreement
contained in this Agreement.
6.2. Regulatory Approvals. The Purchaser will promptly execute and
file, or join in the execution and filing, of any application or
other document that may be necessary in order to obtain the
authorization, approval or consent of any Governmental Body, or
which the Seller may reasonably request in connection with the
consummation of the transactions contemplated by this Agreement.
The Purchaser will use their best efforts to promptly obtain all
such authorizations, approvals and consents.
6.3. Necessary Consents. During the term of this Agreement, the
Purchaser will use their best efforts to obtain such written
consents and take such other actions as may be necessary or
appropriate to facilitate the consummation of the transactions
contemplated hereby and by the other Transaction Documents.
6.4. Satisfaction of Conditions Precedent. During the term of this
Agreement, the Purchaser will use their best efforts to satisfy or
cause to be satisfied all the conditions precedent that are set
forth in Section 7.
7. Conditions.
7.1. Conditions Precedent to Each Party's Obligations. The respective
obligations of each party hereunder are subject to the fulfillment
or satisfaction on or before the Closing Date of each of the
following conditions (any one or more of which may be waived in
writing by all of the parties to this Agreement):
7.1.1. Compliance with Law. There shall be no Law enacted,
entered, enforced or deemed applicable to the transactions
contemplated hereby or by the other Transaction Documents
which would prohibit or render illegal the transactions
contemplated hereby or thereby.
7.1.2. No Legal Proceedings or Orders. There shall not have been
instituted, pending or threatened any Legal Proceeding by or
before any Governmental Body, nor shall
Exhibit 99.5
Page 11
there be in effect any Order issued by any Governmental Body,
or threat of any Order, that (i) prevents or seeks to prevent,
or (ii) questions the validity of this Agreement or the other
Transaction Documents or any action taken or to be taken in
connection with the consummation of the transactions
contemplated hereby or thereby.
7.2. Conditions Precedent to Obligations of the Seller. The obligations
of each of the Sellers hereunder are subject to the fulfillment or
satisfaction on or before the Closing Date of each of the following
conditions (any one or more of which may be waived in writing by
the Seller):
7.2.1. Accuracy of Representations and Warranties. The
representations and warranties of the Purchaser set forth in
Section 4 shall be true and accurate in all material respects
on and as of the Closing Date with the same force and effect
as if they had been made at the Closing, and the Seller shall
receive a certificate to such effect signed by an officer of
the Purchaser.
7.2.2. Covenants. The Purchaser shall have performed and complied
in all material respects with all of its covenants required to
be performed by them under this Agreement on or before the
Closing Date.
7.3. Conditions Precedent To Obligations of the Purchaser.
7.3.1. The obligations of the Purchaser hereunder are subject to
the fulfillment or satisfaction on or before the Closing Date
of each of the following conditions (any one or more of which
may be waived in writing by the Purchaser):
7.3.2. Accuracy of Representations and Warranties. The
representations and warranties of each of the Sellers set
forth in Section 3 shall be true and accurate in all material
respects on and as of the Closing Date with the same force and
effect as if they had been made at the Closing, and the
Purchaser shall receive a certificate to such effect signed by
each of the Sellers.
7.3.3. Covenants. Each of the Purchasers shall have performed and
complied in all material respects with all of the covenants
required to be performed by such Seller under this Agreement
on or before the Closing Date.
7.3.4. Documents. The Purchaser shall have received all written
consents, assignments, waivers, authorizations or other
certificates reasonably requested of the Companies in writing
to provide for the continuation in full force and effect of
any and all material Contracts of the Companies and for each
of the Sellers to consummate the transactions contemplated
hereby and by the other Transaction Documents.
7.3.5. Government Consents. There shall have been obtained on or
before the Closing Date such material Permits and there shall
have been taken such other action, as
Exhibit 99.5
Page 12
may be required to consummate the transactions contemplated
hereby and by the other Transaction Documents by any
Government Body having jurisdiction over the parties and the
actions herein proposed to be taken, including but not limited
to requirements under applicable federal and state securities
laws.
7.3.6. Satisfactory Completion of Due Diligence. The Purchaser
shall have (i) received all due diligence materials requested
by the Purchaser from the Companies and the Seller and shall
be satisfied in their sole discretion with the results of
their review and analysis of such materials, and (ii)
conducted interviews with such members of the Companies'
management or such other personnel as the Purchaser shall have
requested and shall be satisfied in their sole discretion with
the results of such interviews.
8. Further Agreements of the Parties.
8.1. Indemnity. The Seller and, until the Closing, the Companies,
agrees to indemnify, defend and hold harmless the Purchaser (and
each officer, director, shareholder, affiliate, agent and permitted
assign thereof) from and against any and all losses, liabilities,
damages, deficiencies, costs or expenses (including interest,
penalties, and attorneys' fees, disbursements and related charges)
(collectively, "Losses") based upon, arising out of or otherwise in
respect of any inaccuracy in or breach of any representations,
warranties, covenants or agreements of the Companies or of the
Seller contained in this Agreement or the other Transaction
Documents.
8.2. The Purchaser agrees to indemnify, defend and hold harmless the
Companies (and each officer, director, shareholder, affiliate,
agent and permitted assign thereof)and the Seller from and against
any and all Losses based upon, arising out of or otherwise in
respect of any inaccuracy in or breach of any representations,
warranties, covenants or agreements of the Purchaser contained in
this Agreement or the other Transaction Documents.
8.3. The indemnification provided for in Section 10 shall be an
exclusive remedy for the parties, and the other individuals and
entities entitled to indemnification thereby.
9. Miscellaneous.
9.1. Survival of Representations and Warranties. The representations
and warranties of the Seller contained in this Agreement shall
survive the Closing for the benefit of the Purchaser until one year
following the Closing Date. The representations and warranties of
the Purchaser shall survive the Closing for the benefit of the
Seller until one year following the Closing Date.
9.2. Certain Definitions.
"Closing" shall have the meaning set forth in Section 1
hereof.
Exhibit 99.5
Page 13
"Closing Date" shall have the meaning set forth in Section 1
hereof.
"Common Stock" means shares of the Companies' Common Stock,
par value $.01 per share.
"Confidential Information" shall mean confidential records and
information, including, but not limited to, development, marketing, purchasing,
organizational, strategic, financial, managerial, administrative, manufacturing,
production, distribution and sales information, distribution methods, data,
specifications and processes presently owned or at any time hereafter developed
by a Person or its agents or consultants or used presently or at any time
hereafter in the course of the business of such Person, that are not otherwise
part of the public domain.
"Contract" means any contract, agreement, indenture, note,
bond, loan, instrument, lease, conditional sale contract, mortgage, license,
franchise, insurance policy. commitment or other arrangement or agreement,
whether written or oral.
"Environmental Claim" means any accusation, allegation, notice
of violation, action, claim, Lien, demand, abatement or other Order or direction
(conditional or otherwise) by any Governmental Body or any Person for personal
injury (including sickness, disease or death), tangible or intangible property
damage, damage to the environment, nuisance, pollution, contamination or other
adverse effects on the environment, or for fines, penalties or restrictions
resulting from or based upon the violation, or alleged violation, of any
Environmental Laws, Orders or Permits of or from any Governmental Body relating
to environmental matters connected with the Facilities.
"Environmental Law" means any Law concerning the environment,
or activities that might threaten or result in damage to the environment or
human health, or any Law that is concerned in whole or in part with the
environment and with protecting or improving the quality of the environment and
human and employee health and safety.
"Environmental Matters" means any matter arising out of or
relating to human and employee health and safety or the environment which could
give rise to liability or require the expenditure of money to address.
"Facilities" means real property, leased or operated by the
Companies.
"Governmental Body" means any governmental or regulatory body,
whether federal, state, local or foreign, or any agency, instrumentality or
authority thereof, or any court or arbitrator (public or private).
"Indebtedness" means at a particular time, without
duplication, (i) any indebtedness for borrowed money or issued in substitution
for or exchange of indebtedness for borrowed money, including any bank overdraft
or other similar extension of credit, (ii) any indebtedness evidenced by any
note, bond, debenture or other debt security, (iii) any
Exhibit 99.5
Page 14
indebtedness for the deferred purchase price of property or services with
respect to which a Person is liable, contingently or otherwise, as obligor or
otherwise (other than trade payables and other current liabilities incurred in
the ordinary course of business which are not more than 30 days past due), (iv)
any commitment by which a Person assures a creditor against loss (including,
without limitation, contingent reimbursement obligations with respect to letters
of credit), (v) any indebtedness guaranteed in any manner by a Person
(including, without limitation, guarantees in the form of an agreement to
repurchase or reimburse), (vi) any obligations under capitalized leases with
respect to which a Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or with respect to which obligations a Person assures a
creditor against loss, (vii) any indebtedness secured by a Lien on a Person's
assets and (viii) any unsatisfied obligation for "withdrawal liability" to a
multiemployer plan" as such terms are defined under ERISA.
"Law" means any federal, state, local or foreign law
(including common law), statute, code, ordinance, rule, regulation or other
requirement or guideline.
"Legal Proceeding" means any judicial, administrative or
arbitral actions, suits, proceedings (public or private), claims or governmental
proceedings.
"Lien" means any lien, pledge, hypothecation, levy, mortgage,
deed of trust, security interest, claim, lease, charge, option, right of first
refusal, easement, or other real estate declaration, covenant, condition,
restriction or servitude, transfer restriction under any shareholder or similar
agreement, encumbrance or any other restriction or limitation whatsoever.
"Material Adverse Change" means any material adverse change in
the business, properties, results of operations, prospects or condition
(financial or otherwise) of the relevant party; provided, however, that
notwithstanding any other provision of this Agreement, none of the following
shall be deemed in themselves, either alone or in combination, to constitute,
and none of the following shall be taken into account in determining whether
there has been or will be, a Material Adverse Change:(a) any failure by the
relevant party to meet internal projections or forecasts or published revenue or
earnings predictions for any period ending (or for which revenues or earnings
are released) on or after the date of this Agreement; (b) any adverse change,
effect, event, occurrence, state of facts or development to the extent
attributable to the announcement or pendency of the transaction documented by
this Agreement (including any cancellations of or delays in customer orders, any
reduction in sales, any disruption in supplier, distributor, partner or similar
relationships or any loss of employees); (c) any adverse change, effect, event,
occurrence, state of facts or development attributable to conditions affecting
the industries in which the relevant party participates, the U.S. economy as a
whole or foreign economies in any locations where the relevant party or any of
its subsidiaries has material operation or sales; (d) any adverse change,
effect, event, occurrence, state of facts or development attributable or
relating to (i) out-of-pocket fees and expenses (including legal, accounting,
and other fees and expenses) incurred in connection with the transactions
contemplated by this Agreement, or (ii) the payment of any amounts due to, or
the provision of any other benefits (including benefits relating to acceleration
of stock options) to, any officers or employees under employment contracts,
non-competition agreements, employee benefit plans, severance arrangements or
other arrangements in existence as of the date of this Agreement, (if
Exhibit 99.5
Page 15
any adverse change, effect, event, occurrence, state of facts or development
resulting from or relating to compliance with the terms of, or the taking of any
action required by, this Agreement); (e) any adverse change, effect, event,
occurrence, state of facts or development arising from or relating to any change
in accounting requirements or principles or any change in applicable laws, rules
or regulations or the interpretation thereof; or (f) any adverse change, effect,
event, occurrence, state of facts or development arising from or relation to
actions required to be taken under applicable laws, rules, regulations,
contracts or agreements.
"Order" means any order, consent, consent order, injunction,
judgment, decree, consent decree, ruling, writ, assessment or arbitration award.
"Permits" means any approvals, authorizations, registrations,
consents, licenses, permits or certificates by any Governmental Body.
"Person" means any individual, corporation, partnership, firm,
joint venture, association, joint-stock Companies, trust, unincorporated
organization, Governmental Body or other entity.
"Representatives" of a Person means its officers, employees,
agents, legal advisors and accountants.
"Shares" means the Common Stock to be purchased hereunder.
9.3. Expenses. Except as otherwise expressly provided herein, all costs
and expenses incurred in connection with the Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such expenses whether or not the transaction is
consummated.
9.4. Further Assurances. The Seller and the Purchaser agree to execute
and deliver, at the requesting party's expense, such other
reasonable documents or agreements as may be necessary or desirable
for the implementation of this Agreement and the consummation of
the transactions contemplated hereby or by the other Transaction
Documents.
9.5. Submission to Jurisdiction; Waiver of Jury Trial; and Consent to
Service of Process.
9.5.1. The parties hereto hereby irrevocably submit to the
exclusive jurisdiction of any federal or state court located
within the State of New York over any dispute arising out of
or relating to this Agreement or any of the transactions
contemplated hereby or by the other Transaction Documents and
each party hereby irrevocably agrees that all claims in
respect of such dispute or any suit, action or proceeding
related thereto may be heard and determined in such courts.
The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now
or hereafter have to the laying of venue of any such dispute
brought in such court or any defense of inconvenient forum for
the maintenance of such dispute. Each of the parties hereto
agrees that a judgment in any such dispute may
Exhibit 99.5
Page 16
be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
9.5.2. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY OF THE
OTHER TRANSACTION DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PARTIES' ACCEPTANCE OF THIS AGREEMENT.
9.5.3. Each of the parties hereto hereby consents to process being
served by any party to this Agreement in any suit, action or
proceeding, by the mailing of a copy thereof in accordance
with the provisions of Section 11.9.
9.6. Entire Agreement; Amendments and Waivers. This Agreement
(including any schedules and exhibits hereto) represents the entire
understanding and agreement between the parties hereto with respect
to the subject matter hereof and can be amended, supplemented or
changed, and any provision hereof can be waived, only by written
instrument making specific reference to this Agreement signed by
the parties hereto. No action taken pursuant to this Agreement,
including without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representation, warranty,
covenant or agreement contained herein. The waiver by any party
hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such
breach or as a waiver of any other or subsequent breach. No failure
on the part of any party to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right,
power or remedy by such party preclude any other or further
exercise thereof or the exercise of any other right, power or
remedy.
9.7. Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Florida
without giving effect to the principles of conflict of laws
thereunder.
9.8. Table of Contents and Headings. The table of contents and section
headings of this Agreement are for reference purposes only and are
to be given no effect in the construction or interpretation of this
Agreement.
9.9. Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have
been duly given when (a) delivered by hand, (b) sent by facsimile
(with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested (provided that
facsimile
Exhibit 99.5
Page 17
notice shall be deemed received on the next business day if
received after 5:00 p.m. Eastern Standard Time), or (c) when
received by the addressee, if sent by a nationally recognized
overnight delivery service, in each case to the appropriate
addresses and telecopier numbers set forth below (or to such other
addresses and facsimile numbers as a party may designate by notice
to the other parties):
If to Purchaser to:
------------------
Trinity Group Acquisition Corp.
Attn: Lewis S. Schiller
xxxxxxxx
xxxxxxxxx
If to the Companies or Seller to:
--------------------------------
The Finx Group, Inc.
Attn: Lewis S. Schiller
249 Saw Mill River Road
Elmsford, NY 10523
(914) 592-6014 (facsimile)
9.10. Severability. If any term, provision, covenant or condition of
this Agreement or part thereof, or the application thereof to any
Person, place or circumstance shall be held to be invalid,
unenforceable or void by a court of competent jurisdiction, the
remainder of this Agreement and such term, provision, covenant or
condition shall remain in full force and effect, and any such
invalid, unenforceable or void term, provision, covenant or
condition shall be deemed, without further action on the part of
the parties hereto, modified, amended and limited, and the court
shall have the power to modify, amend, and limit such term,
provision, covenant or condition, to the extent necessary to render
the same and the remainder of this Agreement valid, enforceable and
lawful.
9.11. Binding Effect, Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective
successors and permitted assigns. Nothing in this Agreement shall
create or be deemed to create any third party beneficiary rights or
any other rights of any kind in any Person or entity not a party to
this Agreement except as specifically provided herein. No
assignment of this Agreement or of any rights or obligations
hereunder may be made by the Seller (by operation of law or
otherwise) without the prior written consent of the Purchaser and
any attempted assignment without such required consent shall be
void.
9.12. Confidential Information. All Confidential Information with
respect to any party hereto is considered secret and will be
disclosed in confidence. Each party hereto acknowledges that, it
may have access to and become acquainted with Confidential
Information of another party. Each party hereto agrees that it will
not prior to the Closing Date (or in the event of the termination
of this Agreement in accordance with its
Exhibit 99.5
Page 18
terms) and at all times thereafter, directly or indirectly for any
reason whatsoever, disclose or use any such Confidential
Information. All records, files, drawings, documents, equipment and
other tangible items, wherever located, relating in any way to or
containing Confidential Information, which any party has prepared
or shall in the future prepare, shall be and remain the sole and
exclusive property of such party and shall be included in the
Confidential Information. Upon termination of this Agreement in
accordance with its terms, the parties shall promptly deliver any
and all of the Confidential Information and copies thereof of any
other party, not previously delivered to such party, that may be in
its possession or under its control. The foregoing restrictions
shall not apply to the use, divulgence, disclosure or grant of
access to Confidential Information to the extent, but only to the
extent, (i) expressly permitted or required pursuant to any other
written agreement between the parties, (ii) such Confidential
Information has been publicly disclosed (not due to a breach by any
party of its obligations hereunder, or by breach of any other
Person, of a fiduciary or confidential obligation to a party) or
(iii) a party is required to disclose Confidential Information by
or to any court of competent jurisdiction or any other Governmental
Body; provided, however, that the party required to disclose such
Confidential Information shall, prior to any such disclosure,
immediately notify the party which owns the Confidential
Information of such requirement and provided further, that such
party shall have the right, at its expense, to object to such
disclosures and to seek confidential treatment of any Confidential
Information to be so disclosed on such terms as it shall determine.
9.13. Public Announcement. The parties shall cooperate with respect to
any public announcement relating to the transactions contemplated
hereby or by the other Transaction Documents; and neither party
will issue any public statement announcing such transaction without
the prior consent of the others, except as such party in good faith
(based upon advice of counsel) believes is required by law and
following notice to the other party.
9.14. Counterparts. This Agreement may be executed in multiple
counterparts each of which shall be an original but all of which
together shall constitute one and the same instrument. This
Agreement may also be executed and delivered by exchange of
facsimile copies showing the signatures of the parties, and those
signatures need not be affixed to the same copy. The facsimile
copies showing the signatures of the parties will constitute
originally signed copies of the Agreement requiring no further
execution.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
Exhibit 99.5
Page 19
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above.
ATTEST: THE FINX GROUP, INC.
________________________ By: ___________________________
SIGNATURE LEWIS S. SCHILLER
CHIEF EXECUTIVE OFFICER
------------------------
PRINT NAME
.........................................................................
ATTEST SEQUENTIAL ELECTRONIC
SYSTEMS, INC.
________________________ By: ___________________________
SIGNATURE LEWIS S. SCHILLER
CHAIRMAN
------------------------
PRINT NAME
.........................................................................
ATTEST S-TECH, INC.
________________________ By: ___________________________
SIGNATURE LEWIS S. SCHILLER
CHAIRMAN
------------------------
PRINT NAME
Exhibit 99.5
Page 20
.........................................................................
ATTEST DEFENSE MANUFACTURING
SYSTEMS, INC.
________________________ By: ___________________________
SIGNATURE LEWIS S. SCHILLER
CHIEF EXECUTIVE OFFICER
------------------------
PRINT NAME
.........................................................................
ATTEST: TRINITY ACQUISITION CORP.
________________________ By: ___________________________
SIGNATURE LEWIS S. SCHILLER
CHIEF EXECUTIVE OFFICER
------------------------
PRINT NAME
Exhibit 99.5
Page 21